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Welcome to Liberty Media Corporation's first quarter earnings call for 2025. This conference will be recorded, and it is May 7. I would now like to hand the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please continue.
Thank you, and good morning. Before we begin, we want to remind everyone that this call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Actual events or results may vary significantly due to various risks and uncertainties, including those outlined in the latest 10-K and 10-Q forms filed by Liberty Media with the SEC. These forward-looking statements are current only as of today's call, and Liberty Media does not undertake any obligation to provide updates or revisions to these statements based on changes in expectations or circumstances. During this call, we will discuss certain non-GAAP financial measures for Liberty Media, including adjusted OIBDA. Definitions and reconciliations for Liberty Media Schedule 1 can be found at the end of the earnings press release issued today, which is available on Liberty Media's website. Joining us today are Liberty's President and CEO, Derek Chang; Chief Accounting and Principal Financial Officer, Brian Wendling; President and CEO of Formula One, Stefano Domenicali; and other members of Liberty Management for the Q&A session. I will now hand it over to Derek.
Great. Thank you, Shane. Good morning, everyone. It has been a great start to the year at Liberty. Importantly, the priorities we have outlined for 2025 are progressing well. Namely, number one, we are working towards the close of the Dorna acquisition; two, continuing our path towards structural simplification. And three, we continue to drive momentum at Formula One. Starting first with the Dorna acquisition. We are progressing with the Phase II regulatory process and working constructively with the European Commission. We hope to receive approval by the long stop date of June 30, 2025. The MotoGP kicked off 2025 with its first-ever season launch event in Bangkok. The event generated massive buzz bringing together all 11 teams to showcase MotoGP as a thrilling sport and premium entertainment brand. MotoGP will host a 22 race calendar in 2025 compared to 20 races last year, which was impacted by race cancellations necessitating 2 replacement races scheduled mid-season. The season is off to a great start with incredible on-track action and growth independence across the first 5 races completed to date. The Argentina Grand Prix set a new attendance record for the track with over 200,000 spectators. The attendance was up 15%, and COTA hosted its largest crowd since 2018, and Herrera saw its highest attendance since 2015 with 24% growth over 2023. The company announced several commercial agreements to start the season, including Pirelli as the new tire supplier starting in 2027 and the extensions of the Barcelona French and Valencia GPs through 2031. Our second priority is continuing to progress our structural simplification, including the planned split-off of Liberty Live. Our third priority is continuing to drive momentum at Formula One. The confluence of excellent racing and commercial momentum is benefiting engagement and financial results in 2025. There are several areas currently in focus worth highlighting. We are seeing continued momentum in sponsorship and licensing to start the year. An excellent showcase with the LEGO partnership last weekend in Miami, where all 10 teams rode in fully drivable LEGO F1 cars for the drivers' parade. The project took over a year to come to life and required 400,000 LEGO bricks per car. It was an amazing collaboration that captivated our fans and the Internet and our drivers loved it. Looking ahead, pulling the sponsorship pipeline forward has allowed our team to focus on 2026 and beyond and emphasize securing blue-chip names aligned with the F1 brand. The appeal and breadth of the F1 brand are uniquely resonating with sponsors across B2B and consumer brands alike. Second, we are focusing on improving LVGP stand-alone economics and maximizing the overall benefit to the F1 ecosystem. Tickets went on sale in early April and volumes are trending ahead of this time last year. Lower initial ticket prices are driving momentum, which we expect will drive greater sell-through. With the first 2 years having demonstrated clear benefits to the wider Vegas ecosystem. We are engaged in encouraging discussions with key local stakeholders to ensure their support and best position the event for future growth. Finally, our current U.S. media rights agreement concluded at the end of 2025, and we are in active and productive discussions for a new deal. F1 is a strong product for broadcasters with solid growth in the U.S., including this season and an attractive demographic with 1/3 of viewers under age 35, females representing 42% of the fans. We remain focused on finding the right partner to continue to innovate on broadcast offerings and sustain our momentum in the U.S. While it's early in the year, performance to date is strong. The contractual nature of Formula One's cash flow provides high visibility into our business performance for the next several years and will be especially important in this macroeconomic climate. As of March 31, Formula One had $14.2 billion of future revenue secured under contract. Advanced ticket sales for our promoters and hospitality tickets for the remainder of the season remain strong. We continue to actively monitor changes in consumer sentiment, though historically, Formula One's business model has proven resilient in times of economic uncertainty. We are encouraged by the strength of the business and look forward to completing the rest of an exciting season. Now, I'll turn it over to Brian for more on Liberty's financial results.
Thanks, Derek, and good morning, everyone. At quarter end, Formula One Group had attributed cash and liquid investments of $2.8 billion, which includes $1.5 billion of cash at F1 and $69 million of cash at Quint. Total Formula One Group attributed principal amount of debt was $2.9 billion at quarter end, which includes $2.4 billion of debt at F1, leaving $526 million at the corporate level. F1's $500 million revolver is undrawn and their leverage at 3/31 was 1.2x. As a reminder, all MotoGP transaction-related financing is in place and deal contingent. Turning to the Formula One business, I'll make brief comments on the quarterly results. Though as we all know, the business is best analyzed on an annual basis given variability in the year-over-year race calendar and timing of events. Note that every quarter in 2025 will have incomparable race count and mix, which will impact year-over-year comparisons of quarterly results throughout the year. Most of the variability in year-over-year results is due to the 2 races held in Q1 2025 compared to 3 races in Q1 2024. Race promotion revenue decreased due to the mix of races with Australia and China occurring in the current period compared to Bahrain, Saudi Arabia and Australia in the prior year. Media rights and sponsorship declined as only the 2024 projected season-based revenue was recognized compared to 2023 last year. Sponsorship is also impacted by the calendar shift as the Saudi Arabia and Bahrain races both have race-specific local title sponsorships and recognition of that race-specific revenue shifted with the timing of those races. However, the decline in sponsorship revenue was largely offset by strong underlying growth from new and renewed deals impacting 2025. Media Rights revenue is benefiting from contractual increases in rights fees and continued growth in F1 TV, benefiting from the launch of the new premium subscription tier. Other revenue declined during the first quarter as a result of one less Paddock Club event and the mix of races held. Adjusted OIBDA declined alongside revenue during the quarter driven by the calendar variance. Other costs of F1 revenue increased due to higher freight costs with longer routes flown and increased commissions and partner servicing costs, servicing the overall primary F1 revenue growth as well as higher costs for Grand Prix Plaza due to more activity compared to Q1 2024. On a full-year basis, we expect other costs of F1 revenue to be consistent with prior years as a percentage of total revenue. SG&A increased in the first quarter due to marketing costs associated with the season launch event at the O2 and should be viewed as a percentage of total revenue for the full year. Team payments decreased in the first quarter due to the lower pro-rata recognition with 1 less race held partially offset by the expectation of higher full-year team payments. As a reminder, team payments as a percent of pre-team adjusted OIBDA was 61.5% in 2024, and we expect that percentage to continue to come down as we complete the term of the current Concorde agreement at the end of 2025. In connection with all 10 teams signing the 2026 Concorde Commercial agreement, Formula One paid a total of $50 million to the teams in the first quarter. This cost is excluded from adjusted OIBDA and presented separately from team payments. Although revenue and adjusted OIBDA were lower year-over-year due to the calendar variance, we are seeing a strong financial start to the year and are tracking well against our internal plan. Grand Prix Plaza in Las Vegas officially opened its new year-round activations on May 2. Revenue from these activations will be recognized at the F1 OpCo level that we expect results will have a modest impact in 2025 as we scale that business. The vast majority of the CapEx required to build out Grand Prix Plaza activations was incurred in the first quarter. Total F1 CapEx was approximately $33 million year-to-date, including slightly less than $20 million incurred related to Grand Prix Plaza. Looking briefly at Corporate and Other results in the first quarter. Revenue was $53 million which includes Quint results and approximately $6 million of rental income related to the Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA loss was $12 million and includes Grand Prix Plaza rental income, Quint results and corporate expenses. Reminder that Quint's business is seasonal with the largest and most profitable events taking place in Q2 and Q4. Q1 has modest event activity while still incurring ordinary course operating expenses. Quickly turning to the Liberty Live Group. There is attributed cash of $314 million and $400 million of undrawn margin loan capacity relating to our Live Nation margin loan. As of May 6, the value of our Live Nation stock held at Liberty Live Group was $9.3 billion. We have $1.15 billion in principal amount of debt against these holdings. Liberty and F1 are in compliance with their debt covenants at quarter end. With that, I'll turn the call over to Stefano to discuss Formula One.
Thanks, Brian. Formula One has had an impressive start in 2025. We've completed six races this season and are witnessing thrilling competition on the track. The victories are being distributed among various teams, making the races more competitive than anticipated. Although it's still early in the season, we anticipate that this exciting trend will continue. The outstanding performances on the track have boosted fan engagement significantly. Attendance is higher than last year, with nearly all races selling out so far. We set a new attendance record at the Australian Grand Prix, drawing an incredible 465,000 attendees over the weekend. Demand for the rest of the year remains strong as well, with Mexico selling out in just hours for the 10th consecutive year. Montreal also reported high demand, with most guests from 2024 returning this year. The appetite for hospitality products continues to thrive, with over 12,000 tickets sold at Tower Paddock Club this season and strong advanced sales expected for the remaining races. We are committed to exploring opportunities to increase capacity and innovate hospitality offerings wherever demand exceeds supply. In terms of viewership, live TV ratings grew for the first five races, amassing over 60 million cumulative linear TV viewers during the Australian Grand Prix weekend. Particularly in the U.S., ESPN viewership increased by 45% across those races, making the Australian Grand Prix the most viewed race ever for the U.S. audience. Brazil, France, and Australia also saw notable growth in linear viewership. Highlights on our F1 YouTube channel have risen by 31% year-over-year, showcasing the increasing importance of our digital platforms as fans discover new ways to connect with our content. Our social media following has now surpassed 100 million, which is a 30% increase from last year, with particularly strong growth on Instagram, TikTok, and YouTube in the first quarter. Nielsen's recent fan data from March indicates a continued rise in F1 fandom, with our total fan base exceeding 826 million by year's end, adding nearly 90 million new fans in 2024. These engagement statistics reflect our sport's growing global popularity and validate our efforts to enhance the F1 experience for fans. On the commercial front, we are excited about our momentum. As we work on finalizing our 2026 calendar, we announced the renewal of our Mexico Race through 2028 and Miami through 2041, highlighting our success in the U.S. market. Most of our races are now secured under medium and long-term contracts, and we see strong interest from potential new race hosts as we explore various future opportunities. The Netherlands will host its final race in 2026, and Spa will alternate races from 2027, creating an opening in our 2028 calendar. Tickets for the Las Vegas race went on sale on April 9, offering new pricing and packages, with general admission starting at $50 for a single day and $400 for a three-day pass in the Flamingo zone. We informed fans that prices will not drop from the initial sales, encouraging urgency in purchasing. Our sales pace in Vegas is notably exceeding last year's performance. Our media rights segment continues to show robust competition for high-profile sports rights. F1 TV subscriber growth is strong, up 4% year-over-year, with a 20% increase in the U.S. market. The newly launched F1 TV Premium tier has surpassed expectations, particularly in key markets such as the U.S. We are engaged in constructive discussions regarding U.S. media rights with multiple partners and anticipate being able to provide updates soon. Beyond live races, additional content like Formula 2, Formula 3, the Sprint, and F1 Academy continues to offer broadcasters valuable programming. Viewership for Sprint races has experienced impressive growth, as evidenced by the impressive audience of over 1 million viewers for the live broadcast of the Sprint at the Chinese Grand Prix on CCTV, and viewership doubled in Italy during Lewis Hamilton's first win for Ferrari. Outside the race weekends, the seventh season of Drive to Survive has once again reached the Netflix Global Top 10 and appeared on the top 10 lists in 39 countries. The F1 Academy docuseries will premiere on Netflix on May 28, and our Apple movie will debut on June 16, alongside the release of the film's soundtrack and merchandising last weekend in Miami. In terms of sponsorship, we entered the year with strong visibility for 2025 and a robust growth pipeline. Recent partnerships include Barilla pasta as an official partner and PWC as our official consulting partner, where they will provide strategic consulting focused on enhancing our global operations. Our team is making progress on various high-value renewals and new partnerships for both 2025 and 2026. Licensing remains a key growth area, with our new partner LEGO experiencing tremendous demand for its F1 products, averaging one piece sold every second in March. A thrilling activation in Miami featured all drivers participating in a parade in fully drivable LEGO cars. Our experiential licensing continues to expand with F1 Arcade. The Boston and Washington DC locations hosted sold-out watch parties for the Australian Grand Prix, while a new arcade venue is set to open in Philadelphia on May 29, with additional locations in Denver, Las Vegas, and Chicago coming in the fourth quarter. The F1 exhibition sold over 530,000 tickets within the last 12 months, with Buenos Aires and Amsterdam achieving impressive sales in their opening months. In March, we launched new activations at the Grand Prix Plaza in Las Vegas, which just opened to the public, providing fans with year-round F1 experiences and a fun daytime destination in Las Vegas. Grand Prix Plaza features an F1-themed cartoon experience, an immersive F1 exhibit, the latest racing simulator, a casual dining option, a retail store, and three private event spaces, generating revenue throughout the year when not utilized for the Grand Prix. Regarding Formula One's sustainability initiatives, we recently issued a report detailing our progress from the 2024 season, with a full impact report slated for release later this year. We have made significant investments in sustainable aviation fuel, with 90% of our promoters enhancing fan accessibility and travel options, and all promoters collaborating with local community organizations to engage the next generation. Starting in 2026, F1 cars will run on 100% sustainable fuel, a critical development for the automotive industry as nations seek methods to cut greenhouse gas emissions from vehicles. Our recent power unit manufacturing meeting in Bahrain reinforced our commitment to the upcoming engine regulations set for 2026, with all teams collaborating to secure the best racing conditions. We expect F1 teams to begin focusing their efforts on the 2026 engine as the season progresses. Looking ahead, despite being early in the 2025 calendar, we are already planning for 2026. We have agreed on terms for Cadillac's entry into the championship in 2026, as well as a new Concorde commercial agreement with the teams for 2026 to 2030, making significant strides on the governance terms. The financial aspects of both the commercial and governance proposals are beneficial to the entire F1 ecosystem and highlight the collaboration we have established with the FIA and F1 teams to mutually grow our sport. In conclusion, we are very pleased with the start to our 2025 season. Our strong on-track performance, expanding fan base, and solid financial results position us favorably for an excellent year in 2025 and beyond. Full Speed Ahead. Now I'll turn the call back over to Derek. Thank you.
Thank you, Stefano and Brian. A very quick note and exciting news. Please save the date for this year's Liberty Media Investor Day. Changing things up this year, Investor Day will be held alongside the Las Vegas Grand Prix on Thursday, November 20 in Las Vegas. We will have more details to share in due course and look forward to seeing many of you there. We appreciate your continued interest in Liberty Media. And now I'd like to open the call for questions. Operator?
分析師問答
Our first question today is from Stefan Laszczyk of Goldman Sachs.
Maybe to start just on team payments and the budget for the year. Bryan, curious if you could talk a little bit more about how the team payment budget is structured for the year. And if there were opportunities for upside in that budget in terms of what you pay the teams, what some of the larger opportunities out there could be over the course of 2025 as you execute against them and reach the potential of what you think this business could produce this year.
Yes. Thank you for the question. At the beginning of the year, and as we've talked about in the past, there's always prudent financial forecasting at the beginning of the year. We do think that there's opportunities for upside, but we want to be conservative in thinking about the variables that we have out there, which are the Las Vegas Grand Prix towards the end of the year, and then sponsorship. Everything else is contracted. And as you've seen in the past and we've talked about in the recent quarters, the company is moving away from large contracts and sponsorship in the current year and focusing on future years. Are there still opportunities? Yes, there's probably some opportunities there. But the biggest unknown will ultimately be ticket sales, which you've heard are trending well currently.
That's great. And then maybe just a follow-up on the sponsorship business. It sounds like there's still some focus on bringing in sponsors or renewing in '25. Would be curious if you could just comment on what those are and to what extent this could still move the needle. And then I guess as we look out into '26, it sounds like your attention is focused there as well, longer sales cycles on the sponsorship side. Something you've been focused on. Just curious if you could give us an early read or early look into the '26 sponsorship funnel and to the extent you think that could grow off of '25, what the banded outcome could potentially look like on that?
I'll turn it over to Stefano.
Thanks, Stephen, for the question. Thank you. I mean, I think that we have proven in the last couple of years that our strategy with regard to sponsorship is quite solid. The main focus is for sure to maximize our revenues, but we need to make sure that the partners that we have are stronger and invested with us with our experiential world. We have a strong pipeline and what we have said already and is confirmed to be here is the quality over quantity and a very, very genuine activation with our partners because this is crucial in this moment where we want to make sure that our platform is what really our sponsors want. And the evolution between the structure of our partnership between global, official, regional and technical is getting stronger and stronger. So the focus is definitely to see if we have seen some opportunities in '25, but the big one is to keep going on in the next couple of years, and it just reminds all of us where we were just 4 or 5 years ago and now where we are today. There is still a long way to go, and we are very optimistic on the fact that we will continue to grow that as a revenue stream. And also as a potential awareness increase through them to our partners of our products.
Thanks, Stefano. This is Derek. I want to add that I've had the chance to spend time with Stefano at the track during the last couple of races. In conversations with both current and potential sponsors, I've never witnessed such energy and excitement about engaging with the sport and F1. Unlike some of my past experiences with major sports leagues, where there is often a balance of new and old sponsors, here the energy feels consistently high, which is fantastic to see. This enthusiasm extends beyond F1 and to the entire sport, as teams are also growing their sponsor bases. Last week, I spoke with Zach Brown, who is one of the leading marketers in the paddock, and he shared his plans to market the underside of shoes. We'll see how that unfolds.
The next question is from Ben Swinburne of Morgan Stanley.
I’m not sure if Stefano or Derek want to address this, but regarding the media rights process in the U.S., F1 TV has been experiencing significant growth for several years. I’m curious about how you view that as an asset in your U.S. media rights deal. Are you considering bundling it into a broader agreement with a streaming partner, or do you believe that the business has become substantial enough that you prefer to keep it as a separate product? Additionally, is there any update on the Concorde agreement? Can you tell us if you anticipate any team payment leverage occurring between 2026 and 2030? Insights based on previous comments from past earnings calls on this would be appreciated.
Stefano, why don't you go ahead and start?
Yes. I mean, thanks Ben for the question. I mean, you're right. First of all, it's always interesting to see the speculation going around with regard to moments where they were optimistic, negative comments and so on. But apart from that, I would say we came back from this weekend in Miami, really with the fact that we are engaging with multiple partners, and there is a lot of potential interest from many of them, which we need to hammer down because we have the time to do it with the proper proposal. As you were correctly saying, F1 TV product is growing and is very, very positive and the feedback mainly in the U.S. is very, very strong. Therefore, we need to make sure that this asset is right and very valuable. Therefore, we are open to any kind of possible discussion depending on what will be the end and what we believe is the right way to ensure that we keep the penetration in the market as high as possible and making sure that we can monetize out of it. But the dynamics are very positive. So we keep working on it with them. I think that the next month will be crucial to see really where we're going to be. But we come back from Miami, as I said at the beginning, with very good and positive vibes because I think the U.S. audience figure in Miami that were very, very strong shows the potential that we have. I'm sure that the media partners understand that this is a potential asset also for them to develop another small business together. Derek, you want to talk in on that.
Yes, this is Derek. Following up on what Stefano just mentioned, we are having productive discussions with potential partners regarding the U.S. media rights deal. It's interesting to note that the sport continues to grow. As Stefano highlighted earlier, viewership over the weekend has increased by about 45% year-over-year. F1 TV's growth in the U.S. is also up by 20%. Overall, the health of the business remains strong, which I believe has significant implications for the long term, even beyond this year's renewal negotiations. We are still in the early stages of growth for F1 in the U.S., and the uptake of F1 TV at this early point indicates a strong passion for the sport, positioning us well for the future. When considering how to balance F1 TV with a broader media rights deal, we'll need to see how things develop, what partners desire in their agreements, and what aligns best with F1 regarding reach while also maintaining our own products. This helps us understand our customers better because it extends beyond just the content we deliver to them. We aim to engage the most passionate fans of F1 overall. From my perspective, there are numerous ways this can evolve, but a consistent underlying factor is the strong demand for F1 and the engagement from fans here in the U.S., which is encouraging to see.
In response to your second question about the 2026 Concorde commercial agreement, we do anticipate leverage in 2026 compared to the end of 2025. Looking ahead, we foresee a more streamlined structure that will be advantageous for all parties involved in the ecosystem.
The next question is from Kutgun Maral of Evercore ISI.
I just want to ask about MotoGP. I think it's encouraging that we're getting closer to regulatory approval here. Now that maybe there's a bit more clarity on getting that deal done, could you talk a little bit about if anything's changed since the deal was initially announced in terms of the broader opportunity that you see ahead with Moto?
This is Derek. I'll address this. The deal isn't finalized until it's finalized, and we're continuing to collaborate with the European Commission to reach that point, remaining hopeful about it. From our viewpoint, we still see growth potential in MotoGP and possibly feel even more optimistic after spending additional time with them when we can. The challenge with premium sports assets is transforming them into mainstream entertainment properties. We've successfully done this with Formula One and in various other sports, and I believe there is a similar opportunity here. Once the deal is finalized, we will actively engage with MotoGP's management to begin implementing our plans.
The next question comes from Peter Supino of Wolfe Research.
I have a question regarding sponsorship and media rights. With 50% fewer races this year compared to last year, it seems like sponsorship revenue is facing challenges. However, it appears that the growth from new sponsors is largely compensating for that decline. Does this suggest that sponsorship growth was nearly 50% when adjusted for the number of races, and is that figure valuable for our projections? Additionally, regarding media rights, we believe they are often misunderstood due to race times making it difficult for casual fans to watch live broadcasts. The potential for streaming formats might really broaden access for these fans. Plus, since media rights do not include advertising, could you share your insights on these opportunities related to media rights?
Stefano, you want to start on the media rights?
Thank you, Derek. I can start with the media rights. It's important to acknowledge that we've seen growth across all our social platforms, and the interest from the younger generation in accessing our content through YouTube and other engagement methods is significant. We need to ensure that this interest is integrated into our global media rights strategy, not just in the U.S. but worldwide. It's crucial that our clients are becoming more engaged, as this will provide opportunities to connect them with the right products. We need to consider the various types of fans, ensuring they have different options for engagement. This is our primary strategic focus. Additionally, choosing and collaborating with the right partners is vital, especially as we navigate different dynamics. In Europe, for instance, we have a long-term agreement with our broadcaster, which helps us understand market evolution. We recognize that each market has its unique circumstances. Overall, our strategy aims to align with the right partners to enhance the understanding of our sport. On the sponsorship front, the value of our efforts is reflected in the quality and numbers we achieve each year. As Derek mentioned, our partners vary from B2B opportunities to consumer-focused engagements, and we offer significant engagement opportunities, making our platform increasingly relevant. This gives us a strong, positive outlook for our future, especially in the coming years.
Thanks, Stefano. This is Derek. Peter, your comment about F1 being unique, I agree with that. I think that we are uniquely positioned. And I think when you again think about media rights in this day and age, it's not about just what's happening on race day for the 1.5 hours to 2 hours of the race. It's what's happening over the entire weekend. It's also the way different demographics will engage with the property. And that's what we are focused on is continuing to deliver not just sort of the content of the race or even the practices and the qualifying but also delivering it across multiple platforms. So that there are multiple ways that any age of any demographic of any interest can engage with the sport. Because as soon as, as I mentioned earlier on MotoGP, as soon as you're a broad-based entertainment product, you have to recognize that, and you have to be able to touch all of those people and all of those fans. I'll let Brian finish up on that.
Yes. To add to the sponsorship topic, Peter, we won't provide a specific number right now. However, I encourage you to be patient; when we reach Q2, you'll have data from 11 races that will help you understand the sponsorship trend. There are various factors influencing full-year sponsorship revenue, such as calendar changes, new sponsors, contract uplifts, and contracts that expired last year. These elements complicate the situation beyond your initial description.
The next question is from Steven Cahall of Wells Fargo.
Brian, thank you for the guidance on other costs of revenue. Just thinking about that guidance. So I think you said it's going to be consistent with prior years as a percentage of revenue. I think most of us think revenue is going to be up sort of high single digits this year. I think that's an acceleration in other costs versus what you saw last year. I was wondering if you could just help us understand what's in that? Is that due to labor? Is that the Las Vegas Grand Plaza or something else? And then congratulations on the new Concorde agreement. I'm wondering how it contemplates continued focus on competitive balance? And if there's anything in the new agreement that might help start to improve the structure of some of the second-tier teams eventually moving up into more competition with the top-tier teams.
Yes. I'll start with other costs. So on a full-year basis, there's going to be items that increase. We always see that. We have increased partner servicing and commission costs that support the overall revenue growth of the business that are in there. You have some increased Grand Prix Plaza costs as we start the year-round activations. Obviously, those will be offset by the revenue that's being generated there. Otherwise, those are kind of the big things that you would expect. And as we've talked about in the past, we continue to focus on the growth of the business, and so there's growth initiatives that are in there as well to drive future revenue growth in the upcoming years.
Stefano, do you want to talk about the Concorde?
Yes. I mean thanks, Steven. I think that, as you know, for us, it's essential to make sure that the growth of the sport is done in an organic way in a way that we can take on mainly 3 bullet points. The first one on the sporting side to make sure that the teams can be competitive. We need to make sure that the regulation is done in a way that if there are gaps to performance, there is the chance for that we want to recover that. Second part related to the sporting side, I think that we have seen already the massive importance of having the budget cap; the cost cap has given the possibility of the team to understand the level of performance from the technical perspective that they can reach to the money that they have. On the other side, point number two, it is the financial. And we see definitely that a healthy system allows through also Concorde and other sponsorships that are becoming important for the teams, we have a solid team that wants to stay and be even stronger and be competitive for the future. The third point is the awareness that the sport is living is bringing interest and money to all the ecosystem that will regenerate the possibility of this organic growth through what we are doing. Therefore, I think that what we have done with a fair and balanced approach to Concorde is bring the right approach and the right settings for a very, very healthy ecosystem that will be there for the future in the next couple of years will be characterized by these kinds of elements.
The next question is from Ryan Gravett of UBS.
Curious if you can give us an update on how renewal discussions are progressing for some of your non-U.S. media rights. I believe there are some deals coming up in Latin America and some Asian markets. So any color on the competitive tension you're seeing for those rights and if you're likewise seeing any interest from digital players?
Stefano?
Yes. Yes. Thank you, Brian. Yes, of course, that is a more dynamic and, I would say, year-by-year situation. We have so many cultures around the world that in a certain area we can start to see some competition with regard to the streaming side of it. They are still smaller than what you can imagine, but it's definitely a healthy situation. We have countries like Japan, for example, that is quite big for us or other areas in Far East Asia and also in Brazil, for example, that will have an evolution, and we will have a positive impact in our relationship in starting for next year.
The next question is from Joe Stauff of Susquehanna International Group.
I would like to ask if you could share any insights on organic growth or comparable metrics regarding the two races in the first quarter. Additionally, Stefano, I have a follow-up on an earlier question about team competition. It appears that the level of competition has increased, particularly over the last season and into this season. Could you elaborate on the three key areas you mentioned? What have been the most significant reasons or improvements you've made so far?
Stefano, do you want anything to add? I can't get out of this. Sorry, go ahead, Stefano.
No, no, I was saying, Brian, if you want to give your comment on the organic and KPI as the first question, and then we'll jump in on the second question of Joe.
Yes. All I would say is do the math on what we've reported here. We can't give you anything more specific than kind of what we're already showing. But there's a mix of races, obviously. And so you've got Australia and China this year. You've got the 2 Middle Eastern races last year with China not being in the mix. And you can see the impact that you have there on revenue and OIBDA. I was just going to say, Stefano, if there's anything you want to add on attendance or Paddock Club at the one race where we had it, you can add that, but that would be about it.
No, I think you made an excellent point, Brian. The comparison of different elements is quite clear; they don’t even fall into the same category. As you mentioned, we will see a clearer picture as we move into the next quarter, particularly with the organic growth we are experiencing globally. I want to share some positive news regarding our activities around the world, not just limited to our commercial agreements, but also related to Grand Prix events which vary from location to location. The appropriate comparisons will emerge by the end of the year when we have the final results, but everything is progressing positively. Regarding Joe's second question about team competition, we must remember that after many years of development, teams are now closely matched. This year, especially in qualifying, the differences are measured in milliseconds, which is quite remarkable. It’s important to note that when we decide to change regulations, it is a normal process and there are valid reasons for doing so. Initially, this may create larger performance gaps, but the regulations we are implementing aim to reduce the duration of those gaps for teams and manufacturers of new power units. We are also focusing on sustainable fuel and hybrid engines to ensure that our technology remains relevant in the future of our sport.
The next question is from Spencer Amer of Deutsche Bank.
Thanks for the question. You announced a 10-year extension for the Miami Grand Prix with a number of years left on the current deal. I was wondering if you could shed some color on what made you decide to extend the Grand Prix so early?
I can answer that, Derek. Yes. Thanks, Spencer, for the question. We believe that the Miami Grand Prix is a very important pillar of our strategy in the U.S. I mean the job done is really very, very impressive. And of course, we want to give the possibility for them also to keep investing and the more we are able to give that kind of certainty, the more they will invest to grow together, not only on the business evolution but also in order together to have the right partnership to develop the American strategy together with them. They've been proved to be a very, very solid and strong partner. That's the reason why we have anticipated now because there was no reason to wait.
Yes. And just from my standpoint, I went to the first Miami race and then just this last one; I think the improvement and what has happened there on the ground has been pretty impressive. So kudos to our partners in Miami for what they've done, and we look forward to their continued investment in the race.
Our next question is from Jason Bazinet of Citibank.
I just had a very simple question. You rightly pointed out that your business is defensive and is viewed as defensive by investors. The one question we get is people aren't quite sure how to think about the defensiveness of the sponsorship revenue if there was an economic slowdown.
Jason, I think that the answer for that is no one has imagined both, but what we have in front of us. But what we can see is that the credibility of our platform and the fact that we are very close to them with the fact that we are discussing on a daily basis, what are the needs that we need to supply to them is our strength. And the fact that we have a long-term agreement with sponsors is, of course, a financial cover in terms of the risks that we have. But it's more the relation that we have that has been built on trust and understanding each other what the needs are. That's why, as I said, we are always very prudent, but the relationship we have and the quality of the parts that are working together with us allow us to be very, very positive. We have long-term contracts, but of course, that will reduce that financial risk. The good thing is to stay connected and to try to see if that has been happening, how we can adjust together to make sure that our platform will offer to them what they need.
Yes. Continuing from what Stefano mentioned, the quality of our partners and the long-term nature of our deals should help shield us from any potential macroeconomic challenges in the near term. It's important to understand that our partners are seeking broad global exposure, which we provide effectively, arguably better than anyone else. The demand from them is limited, and we cater to that by actively collaborating with our partners to enhance their relationships and meet their objectives. While this is somewhat subjective, our discussions with our partners reveal their ongoing enthusiasm despite the economic headwinds, which have been anticipated for a while now. Their commitment to growing their businesses and our role in helping them reach those goals has been very encouraging.
Is it fair to say it's not as contractual as we do? I was just going to ask...
Sorry. Just to add that we haven't seen.
Go ahead, Jason. Why don't you just ask your next question, and then Stefan or I can answer both.
Okay. I was just going to say is it for investors, is it fair to say it's not as contractual as media rights but may be more defensive than if you had an advertising business? Is that the right framing of it?
No, I think these are not like media deals or advertising deals that are bought on a quarterly or even annual basis. These are long-term agreements, similar to our media rights deals. I won't go into the specifics of the duration of each deal, but I believe that, like any media sponsorship agreements, our partners are committed to investing in what they've partnered with, which requires several years to activate and realize the benefits of that investment. This is why our partners prefer longer-term commitments with us. Consequently, we have mid- to long-term contracts with most of these partners, which is beneficial for us during times like this. Stefano, would you like to add anything?
No, I completely agree, Derek. To be clear, we haven't noticed any slowdown in our conversations despite the current market fluctuations. This is connected to the credibility of our platform and the fact that being a global sport can help each partner differentiate their strategies. So that's the situation we are in today. Everything is positive.
Our last question today comes from Matthew Harrigan of Benchmark.
Thank you. As everyone knows, the LEGO drivers parade was marketing genius incidentally. I have a question. You're really putting up great engagement metrics across the board. I mean, linear is encouraging as well as social. And I think you're probably breaking out maybe more than anyone else in social. But nonetheless, I mean, that doesn't really monetize and sometimes it doesn't even really translate to people watching the linear channel; I think it's just younger people's way they consume content in shorter form, including sports and F1. Do you have any thoughts on how you might be able to better engage people or better monetize rather people who have shorter attention spans versus someone who's going to get up and watch a race for 2 hours?
Stefano, do you want to start?
Thank you, Derek. I appreciate your comment. We take pride in our approach because we are always looking to be different from other platforms to generate interest in what we do. As Derek mentioned earlier, our drivers and partners are on board with our strategy because they see its value. The more we implement these initiatives, the better we can monetize our efforts. It's unrealistic to expect to monetize everything immediately, which is why our strategy needs to be both diverse and comprehensive. We aim to engage with our fans beyond just the two hours of racing on Sundays; we want to connect with them all year round, tailoring our content accordingly. This is a new focus for us, and I believe it opens up another significant revenue stream to strengthen us in areas where we might have been weaker. The key to this potential growth lies in our creativity to differentiate ourselves from other offerings.
Thank you for the question, Matthew. I want to follow up on what Stefano mentioned before we wrap up. He's absolutely correct that we are building an ecosystem. Our goal is to engage as many people as possible with the sport. Historically, some platforms have yielded more direct revenue than others. However, we are not focused on maximizing revenue from each platform or each interaction we have with fans. Our priority is to create a comprehensive universe and ecosystem. For example, when a fan engages with us on social media, it may not lead to immediate revenue. However, that fan might go on to purchase F1 merchandise, attend a race, visit Grand Prix Plaza in Las Vegas, or influence their family to watch the races. There are numerous ways we can eventually monetize these interactions, and not every single contact needs to generate revenue immediately. With that said, I will conclude this quarter's call. Thank you to everyone who participated and for the great questions. We appreciate your support and look forward to continuing the conversation. Thank you very much.