Liberty Media Corp Announces Formula One Group Investor Meeting

Oct 22, 2017 AM CEST
FWONA - Liberty Media Corp
Liberty Media Corp Announces Formula One Group Investor Meeting
Oct 22, 2017 / 04:25PM GMT 

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Corporate Participants
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   *  Charles Carey
      Formula One Group - CEO
   *  Courtnee Alice Chun
      Liberty Media Corporation - SVP of IR
   *  Gregory B. Maffei
      Liberty Media Corporation - President, CEO & Director
   *  Ross Brawn
      Formula One World Championship Limited - MD of Motorsports
   *  Sean Bratches

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Presentation
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 Courtnee Alice Chun,  Liberty Media Corporation - SVP of IR   [1]
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 Welcome today. Thank you for all joining us in Austin, and for those of you on the phone. So we're going to do some moderated Q&A. Greg is going to moderate for us.

 Quickly, I got to get through this one. This call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about future financial prospects, expansion of and changes to the Formula One race calendar; business strategies; future products and services; future economic policies; new opportunities for commercial partnerships, including sponsorships; increases in promotion and marketing; improvement of content distribution and expansion into new medias; uses of cash and other matters that are not historical facts.

 These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, access to capital and acceptable terms, acceptance of new products or services, failure of third parties to perform and general market conditions.

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

 Now I'd like to introduce Greg Maffei, Liberty's Chairman -- oh sorry, Liberty's CEO.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [2]
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 Hopefully, John wasn't listening, yes. Good afternoon from Austin, Texas. I guess it's not quite afternoon here, but afternoon on the East Coast. To those in the room and on the webcast, we hope those at home will tune in to watch the excitement later this afternoon.

 Joining us today in the room, we have Formula One's Chairman and CEO, Chase Carey; Ross Brawn, Managing Director, Motor Sports; and Sean Bratches, Managing Director, Commercial Operations. We have solicited questions in advance for today's webcast, partly because it's very hard to hear inside the room unless you have a mic, so authentic here. And we'll go directly to those questions now.

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Questions and Answers
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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [1]
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 So starting with you, Chase. What is your 5- to 10-year view of the business, given the media -- the changing media landscape and outlook for live events and sports? Where are the F1 teams in terms of aligning with your vision? And what is the right balance between being fan-centric and race-centric?

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 Charles Carey,  Formula One Group - CEO   [2]
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 Late in the weekend for -- to remember those questions, so I may have to -- I may need a cheat sheet to remember 3 questions. Like, ultimately, for this sport, what -- our vision is to create a sport that is really an event that is a spectacle in every way possible. I think our view is that the content world -- and I guess, I view this as a form of content, essentially, you're going to have winners and losers. And unique events like this are clearly ones that'll appreciate in value, as other forms of content get fragmented and struggle to differentiate themselves. There's only going to be one Formula One. And if we make this sport everything it can and should be, we think events like this will just appreciate in value. Like they'll appreciate in value from a fan perspective in a world where events and experiences over objects become increasingly important; in a world where digital payers of enormous size are going to increasingly gravitate towards this type of event, content to drive their businesses, sponsors are going to look for events that really have an identity and meaning to consumers. The global nature of this event, obviously, gives us unique opportunities to build that around the world. So at its core, it is make this sport everything it can be on the track and then build everything around it that can really drive it home as a spectacle that stands out in the world. I think from a -- aligning with that -- aligning the teams, I mean, the teams are generally incredibly supportive, I mean, probably of everything we're doing. If -- they, a little bit like you, probably always want everything done yesterday. So they have a perpetual short-term vision, a short-term set of demands. And realistically, I think we've said repeatedly, to really get this sport to where it can and should be, and we want it to be, it's going to take a few years. I mean, it starts with getting, and Ross will touch on it, the sport and the track to be everything it can be in terms of competition, action and the like, and then building the -- everything that goes around it, whether it's the live experience or the platforms we deliver it on. But we've got -- I think realistically, the teams have been incredibly supported, excited. In the execution, you always get competition for time. We'd like access to their drivers. They've got obviously their own sponsors that they push and pull on access to drivers. So they've got their own agendas. But they want us to grow, but they equally are managing their own sports. So in the day-to-day aspects of it, they're incredibly supportive in the actual execution of the day-to-day agendas. We have to manage those sort of -- that competition for time. The third question, fan-centric versus race-centric, I mean, realistically, this is all about fans. I mean, it's -- I don't even view that as a conflict. I mean, I think...

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 Ross Brawn,  Formula One World Championship Limited - MD of Motorsports   [3]
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 It's a (inaudible) distinction.

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 Charles Carey,  Formula One Group - CEO   [4]
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 Yes. I mean, I think -- yes, I mean, rightfully, teams are always going to focus on winning a race, and that's great. In reality, that's what fans want. You don't want the teams -- you want the teams myopically focused on trying to win a race. And you always had to push and pull. In many ways, your team was trying to win every race, and you want them to do that. We obviously want to balance the competition. So we're trying to sort of create a larger environment that has the drama and excitement that comes with and undergo while having a chance to win the competition on the track. But in some ways, that's our job to create an environment that fosters that. But the teams rightfully should be trying to win every race, so whether it's Ferrari, Mercedes or Williams that are going out there. And if they can win 21 races, they should be trying to do that. We should be creating an environment that, that doesn't happen, where different teams have opportunities and you've got a competitive sport. But sports are entertainment and it's all about fans, and that's what all of us are doing. I mean, the teams don't want to go out here and race in front of nobody. They want to race in front of a full house and with energy, excitement around it. So we're putting on entertainment that is uniquely exciting and dramatic, that brings the thrills that go with sports.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [5]
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 So, great -- great, Chase. Ross, from an operations perspective, how can you make the sport more competitive? Does there need to be a spending cap? Somebody do -- I'm going to rewrite the question. How are you going to convince them it's in their interest, the faster, higher-performing teams today to have a spending cap?

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 Ross Brawn,  Formula One World Championship Limited - MD of Motorsports   [6]
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 I'll do this as a sort of general response rather than specific. But I've been involved in the business a very long time, majority of my time as a competitor, so on that side of the fence, and I've jumped over the fence now and so I'm the, poacher term, gamekeeper. And I know from my experiences within the team, then the finances of the team are vital to the competitiveness of the team. So what that means is that if you take the current dominant team, Mercedes, they have the biggest resources in Formula One. They spend around $0.5 billion on their Formula One program a year to get the results they get on the track. And that's a fantastic achievement. The problem is, they're 4 seconds quicker than the guys at the back of the grid, and that's no good for the business. Also, it's not really sustainable. What happens is when they're winning, those budgets have grown during their period of domination. They spend more to stay dominant. When that domination fades away, the money, the budgets they have become awkward, because they're now not succeeding, yet they're spending a huge amount of money. And those teams, particularly the boards of those teams, have come to us and said, "Please save us from ourselves because we have to get in that loop of achieving success. We want a regulatory- authority. We want control over what we can and can't do to make the business more sustainable, to bring the budgets down to a level that even if we're not winning, we can still justify." So Mercedes, we'll take that example, always want to be winning, they want to be in the top 3. And they're prepared to accept a reduced competitiveness if it means greater sustainability. So they're in this vicious loop now of huge budgets, having to dominate to justify the budget and looking for a way out. So not way out of Formula One, a way out of that condition they're in. So we're working with all the teams now to look at budget control for the future. And I think that's the way forward. So the level of budget control we're talking about will still maintain all the DNA of Formula One, the high-tech, the advanced technology in the cars, the excitement but at a level that's sustainable. And all of the teams are responsive to the introduction of a system over the next few years where we control the level of spend that a Formula One team is allowed to have. And we've got to define what's in that spend. We've got to define the control systems that regulate that spend. But this creates a sustainable Formula One. The other important thing it does is it makes everyone more competitive, because the difference between the guys at the font spending what they do at the moment and the guys who are spending much less further down the grid is reduced enormously. We want the best team. We want a proper meritocracy. We want the best teams to win in Formula One. But when they have an off day, we want the guy who's in the middle of the pack coming through and winning a race. That's a great story. That's a great thing for the sport, and we want to encourage that. And we want the middle field team get a great driver one year, suddenly they're winning races and telling a big story. So Formula One is at a crossroads at the moment. It had -- for many years, there was no structure to develop the sporting, technical and financial framework that the sport was run with. It was the teams themselves that were trying to make the rules up as they went along. And as the competitors, they weren't the best people to do that. And we now have an organization, a structure. I have engineers. I have technicians. I have some financial strategists who are looking at the business of Formula One and working at how we find better solutions to improve the sustainability and to improve the competitiveness of all the teams so we have much better racing. And that's what brought me back into Formula One, the opportunity to do that, and I'm very optimistic. We have a very good response from the teams. And over the next few months, we'll be introducing the ideas we've got and working with the teams to refine them, and they'll be coming in, in the next few years.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [7]
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 Thanks, Ross. Sean, one for you. In broadcast, Formula One seems to have a significant monetization gap versus the other similarly popular sports. How much of that monetization gap do you think is reasonable to close in the next 3 to 5 years?

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 Sean Bratches,    [8]
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 I think that -- you look at what Chase mentioned in the broadest sense and Ross very specifically, our sport is poised to get better and we've got a strategy to do that. And I think the opportunities, as it relates to getting the back of the grid closer to the front of the grid, which Ross is keen on saying, and creating a bigger spectacle around the sport, creating a better narrative in the marketplace, really elevating Formula One to where we think it can be is going to accrue a lot of value to our commercial efforts and specifically on the broadcast side. So I think we're going to have a better product to sell to the marketplace on a going-forward basis. There's indices that -- in the marketplace right now as it relates to ratings being up this year significantly, attendance being up significantly, digital being -- engagement being up significantly that point to that, and I think the broadcast community believes that. We're taking a very pragmatic and cadenced approach. We're doing a lot of research now. We're doing a lot of pre-selling. And Ian Holmes who runs that business directly, Chase and I are making decisions on a market-by-market basis if we go in with a tender or another strategy. We're also providing value to our broadcast partners that, I think, in terms of what they're actually delivering. Next year, we're going to -- as a consumer being in the United States, I would watch a Grand Prix and all the metrics were in kilometers. Next year, we're going to put miles per hour in markets that adopt that construct, and kilometers in markets that adopt kilometers as a metric. So we're doing a lot of things in terms of direct feeds that are going to give them the opportunity to sell localized, trackside inventory on a virtual basis. So I think the sales proposition is getting better. We are -- going forward, the contracts actually come out of contract on a cadence basis, so you don't get everyone coming out of the market at the same time. The deals that we're doing today are short term in anticipation of us improving the sport, and also, in anticipation of the dynamics in the marketplace with new insurgent competitors coming up and being in a position to take advantage of more competition as, I would say, digital platforms become much more interested in it. So we think that there's opportunity for growth, and I think we're well-positioned to take advantage of that.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [9]
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 Thanks, Sean. I got a follow-up, which is related, and it's gotten some press recently as well. Any update on exactly what the OTT product will look like? What content will be included? Is this necessary to get rights in effectively all of your geographies for launching any OTT product in your view? Or is it launching in limited geographies where you already have those rights a viable strategy?

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 Sean Bratches,    [10]
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 Yes. So the technology is changing the way consumers consume content. And as a brand, we need to be positioned for today and tomorrow. And we're going to launch both a live and a nonlive over-the-top product in the market. As the agreements that we've inherited, none of those permit that today; but the agreements that are coming out of contract and those that are being amended, we are recapturing those rights and we're permitting ourselves to launch that in the marketplace. From a nonlive OTT standpoint, we have the right globally today to do so. But from a live standpoint, we need to renegotiate deals that come up or intersect deals that are in the marketplace today. And we've been successful on both fronts in doing so. We're planning on launching a live OTT product in the marketplace next year. You look at marketplaces like the United States, there's between 15% and 20% of television homes that don't have -- that don't subscribe to television, and either for economic reasons or philosophical ones. And we need, as a brand, to be able to serve those consumers. And then, you also look at the petro heads that are the [avids], that are actually in the ecosphere, whether free to air or pay, the technology that broadband provides is going to facilitate our ability to provide enhanced services that the incumbent platforms won't. So we feel good about our position. And in context, as I said earlier, we're improving the proposition for our broadcasters in terms of what we're provisioning. But we're also here to serve fans, and OTT is going to be a big part of that.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [11]
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 Thanks, Sean. Chase, what are you selling at F1? Ferrari is not a car company, for example, it's a lifestyle company. How would you characterize the commercial brand of F1?

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 Charles Carey,  Formula One Group - CEO   [12]
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 What we're selling is a -- and I used the phrase before, realistically, a sports spectacular -- or a sports spectacle that's second to none. And we put out a new mission statement and we use that word spectacle in the first sentence, and that really is what this sport about. In many ways, what distinguishes it from -- I mean, it's a sport that sort of shocks and awes you. I mean, you got the sound, speed, power. You got technology that's married to it, though we're first and foremost a sport. I get asked the question, are you automotive R&D or a sport? And there's no question, we're first and foremost a sport, a sport that uses state-of-the-art technology. But it is -- it starts with a sport that, again, is just a -- is a unique experience and then build around it things that turn it into something that is an event you go home and tell your friends and family about, and then using all the technologies you can to let people connect to a sport that's so rich in information and hero stars. And, I mean, realistically, the drivers out here do something that nobody, very few people in the world would ever consider doing. They're incredible individuals taking a car at this speed around this track. And so it is making this spectacle everything it can and should be, whether it's from a sport perspective or the broader experience perspective and the ability to connect everybody to that.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [13]
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 Thanks. What is your approach -- still on to Chase, and then maybe, Ross, you could add any thoughts as well. What is your approach to expanding and refining the race calendar? What is being done/considered to improve economics for race promoters? And I guess that really goes to anyone else who wants to contribute on that.

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 Charles Carey,  Formula One Group - CEO   [14]
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 So again, on expanding the race calendar, we have the right to do that. I mean, we have built in a prix where you can take it to 25. We've said publicly, I mean, our priority is, realistically, first and foremost, make the races we have great. So I think that is priority one. We have some races that are great. We have some races that we think we can still -- we can certainly add real dimensions to. And we have a lot of things, I guess, as we said, for the overall sport. I hope you guys will touch on that, it's the second part of the question. But there are some places we've highlighted and we want to expand, this country being one. So we've talked about adding a race into a destination city in the U.S. We've got a lot of markets that would like to add races. Most of our contracts are reasonably long term. With that many races, it can come up. And so I think we have the ability to be selective. I think we probably would look to Asia as a market that we could add a race. We're adding 2 races in Europe next year. So there are opportunities there that, again, I'd say, our priority is really, first and foremost, make the races we have everything we can be, although something like the U.S. probably is important. In terms of the economics for the promoters, I think in many ways, it starts with us doing everything we can to make -- to support the sport and make the sport great. As we said, we got to make the action on the track better, more captivating, more exciting. When I talk to a promoter, the first thing they'll say is we'd like the competition to be better, the action to be better, and we've got to improve that product. I mean, today, we have too many races where they get spread out, and the teams that are first, second and third after 10 laps, are the same teams that are first, second and third at the finish. And I hear about the too difficult for passing, so we've got an agenda to enhance passing. We hear about tracks that aren't good for passing, they're not good for passing, we should create areas that are good for passing. So we got to make the sport better on the track. We've got to market the sport. I mean, this isn't a sport that had any marketing. We don't have any presence digitally. So you got to -- to build fan interest, you got to market events, you got to create ability for fans to connect to the sport. So I think, in many ways, it's doing a lot of the things, whether making the product, because the race is our product. These events are our product, making the events bigger, the fan zones, the things that sort of have people wanting to come to races, or ability for people to connect and follow the sport in places. And to some degree, with the partners, it's making sure they understand. I mean, in many places, public entities are a big part of the economics of our sport. We have not -- I think they know the multiple benefits. I mean, we were -- I can't remember which one of the markets we're in, and they attributed a 25% lift in tourism specifically to Formula One having come to that market in recent years. We haven't done a good enough job to really quantify and provide and show the benefits of Formula One being in the locations we're in. So I think we, first and foremost, need to make sure the sport and everything around the sport, we deliver, support that appropriately with marketing connections. And then make sure with our partners, they understand the value there. Look, you're always going to have noise. It's a negotiation, so they're always going to claim they're overpaying, but that's just life. So we're new. And guess what, we're new, so why aren't all 20 of them going to come in and say, "We'd like to pay less." Guess what? We'd like them to pay more. So -- but I think the value we provide speaks for itself. And again, we've got a lot of upside on what we can do in terms of delivering a better race and a better event.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [15]
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 Maybe, Ross, or -- if you want to add anything on the race number, or, Sean, you want to add anything on the -- making it more attractive for promoters, that might be helpful. If not...

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 Ross Brawn,  Formula One World Championship Limited - MD of Motorsports   [16]
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 I think on the race number, the quality is a vital thing. There's no point in having more races unless they're quality races, so location, type of track, the ability to have a great race there is vital. The teams have logistical issues the more races we add, of course. And one of the things we're doing is looking at the format of a race weekend to see if we need to change that to make it logistically easier for them to do more races. So we've got a very open mind about what we -- how we go forward. I think the core race is still -- for me personally, is very important. We're not looking at changing the core event. But open question, do we need Friday running? Because if we didn't have Friday running, we can do more races because, logistically, it's better for the teams. But Friday running's important for the promoters and the broadcasters. How do we find the right solution? So we're looking at all those elements to see the best way forward. But quality is a vital thing with the races. We mustn't just add races because we can increase the numbers, because it's not sustainable. We've got races in the past that came, the quality wasn't there and they fall away, and that's not good for our business.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [17]
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 Great. Sean, you want to add anything on promoters?

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 Sean Bratches,    [18]
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 I think we're in a very unique position. We're not an event like a football game or a basketball game where you go for 2 or 3 hours and you return home. You're coming here for 3 or 4 days, you're spending 6, 7, 8 hours a day. The -- you need to be entertained. And Chase talked a lot about the spectacle, and we're really trying to put our shoulder behind that, whether it's on the grid, outside of what Ross is trying to accomplish in terms of celebrity races, the 2-seater program; whether it's in the Paddock Club trying to bring in iconography like Mercedes power unit so people can actually see what's going on, and evolving them to adopt the ethos of the 20 markets, 21 next year, that we actually go to; reinventing the fan area, so that there's activity for the entire family to attend. So we're very focused on that. And then we've been working on changing and amending some of the opportunities for our promoters to create revenue beyond selling grandstand tickets. An example of that would be creating a secondary hospitality tier between grandstand and Paddock Club. There's a massive gap there, and there's opportunities on an international basis and a local basis to populate that. And if we can work collectively, we're not working against one another trying to pull fans to our respective platforms. So we think there's a lot of opportunity, and we're encouraged about the reception that we received.

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 Ross Brawn,  Formula One World Championship Limited - MD of Motorsports   [19]
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 I think one of the things that I'm proud of that we've managed to achieve this year is the change of relationship with the promoters, with the race tracks. We're an organization there that wants to say yes when the promoter needs something. And I'll just give you a little example. Here, we moved the qualifying back 2 hours to 4:00. And Bobby Epstein told me this morning, he had 20,000 more spectators to the -- unqualifingly, it's ever had before. So we're very receptive to what we -- how we work with the promoters and become partners with the promoters. And I promise you, that was not the case in the past. There's a completely different attitude now to how we work together. And I've seen it. These guys never saw what went on in the past, I did. And I promise you, it's a world different.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [20]
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 So Ross, you're our link to history up here. So tell me about one of the more challenging ones. Explain the dynamics, if you would, around engine suppliers, and what problems that has created to date and what you're attempting to change?

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 Ross Brawn,  Formula One World Championship Limited - MD of Motorsports   [21]
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 What -- the position we're in today is we have a superb piece of engineering. The power train of these cars really is very impressive, but it's inordinately expensive. And for the manufacturers who are running their own teams, that's fine, it's all part of the package. But if you're a customer team, because a number of teams in the pit lane have to buy their engines from the suppliers, the costs are extortionate. The cost of an engine these days is about twice what it used to cost before these engines were introduced. And that was never a factor that was considered when the regulations were introduced. There was a feel that we needed to get a more relevant engine, we've got a hybrid engine now. But the economics, the commercial side of it, particularly for the independent teams, was never considered properly. We're now in the phase of introducing a new engine for 2021, where the commercial consideration's a very strong factor, because this is all part of the sustainability. And also, we want to have, quite frankly, less opportunity for greater investment to bring performance differentiation in with the engine. So we want there to be a difference between a Ferrari engine, a Mercedes engine, a Renault engine. But that gap needs to be controlled so that, again, you can't pour millions of dollars in and start to widen the gap between you and your competitors because you're prepared to make a much greater investment. So we're working on new engine regulations for 2021 and the priorities are different. So the priorities are sustainability, fairness throughout the pit lane and fan engagement. Because one of the things with this engine we have now, despite being a miracle of modern engineering, it hasn't engaged the fans. It's low revving. It's quiet. It doesn't stir the emotions in the way that we need to. So the new engine is going to move back in that direction. And we're just in the process now of introducing the concept to the teams, working with the teams to get the regulations right, and then that will be the engine we have in 2021.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [22]
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 Thanks, Ross. Sean, one for you. What cadence should we expect on new sponsor on-boarding as a sign of successful execution against the previously undermonetized sponsorship and advertising opportunity?

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 Sean Bratches,    [23]
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 I think, generally speaking, with 5 sponsors, we're undersponsored. There's a lot of opportunity on a going-forward basis. We've had a lot of interest in terms of the narrative that's been in the marketplace in terms of our, I would say, liberalization of the ability for sponsors to activate in the marketplace. So we've had a number of sponsors that had been Formula One sponsors that have -- are re-expressing interest. And we've actually hired a -- and populated a sponsorship group. Formula One was devoid of a sponsorship group prior to 2017, which is quite extraordinary for a global brand that's been around for 17 years. So we're actively engaged. The reception has been really encouraging, and we're -- we think there's a lot of opportunity. We're also expanding the amount of inventory that we have at Formula One for sponsors to actually invest in. Heretofore, it was effectively trackside. And we're creating fan fests or we're creating e-sports where, today, if you wanted to buy a display out on our digital properties, you couldn't do it. No pre-roll, no post-roll, no mid-roll, no homepage takeover. So as we move forward and we relaunch, rebuild from the ground up a platform of digital assets that include a responsive web, social capabilities, live, nonlive OTT and an e-sports platform, just an example of some of the ways that brands can engage with our product, invest their brand in ours to make their brand better in effect. And the marketplace is encouraged about that, and we're having a lot of meetings to that end.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [24]
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 Thanks, Sean. The final question, I think we're out of time, is this the last one?

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 Courtnee Alice Chun,  Liberty Media Corporation - SVP of IR   [25]
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 Yes.

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 Gregory B. Maffei,  Liberty Media Corporation - President, CEO & Director   [26]
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 The final question actually is for me, so I'll ask myself. How should we think about the tracking stock structure long term? Strategically, how do you think of the fit between Live Nation, events and ticketing with sports accents like FWON and BATR?

 So on the first part, look, I think we have looked at the tracking stock as being a very valuable way for us to get -- consolidate from a tax perspective and other perspectives in terms of stretching our management team and the like, but still let investors have choice and visibility into particular assets. And I think if you look at the valuation on most of our tracking stocks where there is a pure play, BATR, FWONK, I think we get reasonable valuations; I don't think we're too inhibited. Surely, there are investors who don't like tracking stocks, but there are a bunch of investors who come to believe that Liberty and tracking stocks work pretty well. And you weigh the 2 and we're probably okay. Less of a case, obviously, in the case of Liberty Sirius, where you have a pure play outside and are tracking stock, but I would argue there are other factors other than just the tracking stock structure which are causing that NAV discount. I don't think, in general, it's impairing our valuation. It is offering investors good choice. So I think we -- nothing is forever at Liberty. Most things are rarely more than a week, so -- but in this case, I don't see any immediate changes or plans to change what we're doing with the tracking stock structure. As far as the interplay between Live Nation with both its sports side and its live side, the question also could have embraced the fact that Live Nation, obviously, has a rather large play in music, and we have another large music asset. In fact, it now has -- we have 2 music assets in the form of Sirius and Pandora, where Live Nation could be a factor. And our hope is, is that there's a lot of ability to interplay across. There are things that were done very smartly at BATR, building out SunTrust Park and the Battery and trying to make a sports spectacle that people are very interested in, and there may be ways we can extend that to other things. There are things that Live Nation does around ticketing. I would maintain that the ticketing at Formula One is not as simple perhaps as it might be. Live Nation has invested quite a lot in ticketing. Live Nation has invested a lot around that technology, and in trying to do, there may be ways to leverage. Live Nation has done a lot about thinking about how to make more -- get more revenue out of events. A lot of what's done at Formula One is above the average ticket, certainly what happens at Live Nation, but there's certainly sharing across that would be interesting and powerful. And increasingly, Liberty, including even Sirius, because it has more of it, is a live event company. Between BATR, between Formula One, between Live Nation and even Sirius, all of those have live elements that I think, hopefully, we'll get best practices and find ways to be smart about and leverage their respective resources.

 So I think that's all we have time for today, and this room is getting stifling. So thank you very much for joining us on the call. Thank you all who are in the room coming. And hopefully, we'll have a great race this afternoon. Thank you to my compatriots on the stage.

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 Charles Carey,  Formula One Group - CEO   [27]
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 Enjoy the race today, guys. Thank you.




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Definitions
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PRELIMINARY TRANSCRIPT: "Preliminary Transcript" indicates that the 
Transcript has been published in near real-time by an experienced 
professional transcriber.  While the Preliminary Transcript is highly 
accurate, it has not been edited to ensure the entire transcription 
represents a verbatim report of the call.

EDITED TRANSCRIPT: "Edited Transcript" indicates that a team of professional 
editors have listened to the event a second time to confirm that the 
content of the call has been transcribed accurately and in full.

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contemplated in the forward-looking statements will be realized.

THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION
OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO
PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS,
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