管理層發言
Welcome to the Liberty Media Corporation's 2025 Second Quarter Earnings Call. This conference will be recorded on August 7. I would now like to turn the call over to your host, Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead.
Thank you, and good morning. Before we begin, we would like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q filed by Liberty Media with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. On today's call, we will discuss certain non-GAAP financial measures for Liberty Media, including adjusted OIBDA. The required definition and reconciliation for Liberty Media Schedule 1 can be found at the end of the earnings press release issued today, which is available on our website. Speaking on the call today, we have Liberty President and CEO, Derek Chang; Liberty Chief Accounting and Principal Financial Officer, Brian Wendling; Formula One President and CEO, Stefano Domenicali; and MotoGP CEO, Carmelo Ezpeleta. Other members of management will be available to join for Q&A. And with that, I'll turn the call over to Derek.
Thank you, Shane. Good morning, everyone. It was an active second quarter at Liberty, which saw us progressing the initiatives we laid out to start the year. Regarding our planned split-off of Liberty Live, we filed the initial S-4 at the end of July and are now going through the customary review process. Chad Hollingsworth will be the CEO of Liberty Live Holdings once the split-off occurs. Chad is a Senior Vice President at Liberty, has been our Director of Live Nation since 2020, and is the right person to oversee our investment. We expect to complete the split-off in the fourth quarter. Our next priority is supporting the growth and momentum at F1. The financial results were outstanding this quarter alongside a flurry of new sponsors announced, promoter partners extended, and media rights agreements signed. Stefano will provide greater detail shortly. And finally, we completed our acquisition of MotoGP on July 3. We are now beginning comprehensive work in helping management set their strategic direction to enhance the company's growth. Fortunately, the sport and ecosystem are both in a strong position, providing the foundation to build on for future success. While it's early, I'd like to outline what we see as near- and medium-term priorities for MotoGP. Starting with near-term objectives. First, we want to accelerate the build-out of certain commercial functions, which was already in progress prior to the close. This includes sponsorship and marketing teams in areas like sales, account management, research, public relations, and social media strategy. Second, we will lean into brand positioning and build off the new MotoGP brand campaign that launched last November. Efforts will include developing a more robust fan insights platform, tracking brand awareness and engagement to better inform commercial propositions for new and existing partners. The team has already started new content initiatives with a specific focus on the U.S. and U.K. markets. Third, we have begun collaborating with F1 to explore areas where we can accelerate business initiatives and share learnings. Some of these benefits will take time to materialize and be realized over the longer term. With respect to medium-term priorities, first, we intend to enhance the Grand Prix experience and turn each weekend into marquee events, very similar to the mandate in the early days of F1. This includes improving the hospitality offering and augmenting fan experiences on site as well as ample opportunities to deepen our partnership with Quint. Second, we will expand the sport's global presence and broaden its appeal and reach. The MotoGP team has a clear focus on capturing new fans and growing outside the motorcycle racing world while maintaining its core traditional fans. They are already making progress in optimizing new race locations, including the recent announcement for a race in Buenos Aires in 2027, which strategically locates a track in an urban center as well as a return to Brazil next year after a two-decade absence. We plan to target the U.S. as a key growth market given its limited presence today. Third, we need to scale sponsorship partners as we know this has massive potential given the current heavy reliance on endemic names. Furthermore, there is clear low-hanging fruit like unsold title sponsorships or vacant trackside advertising. However, we are also mindful that sponsorship sales cycles can be long, and the team will manage for the quality of partners with clear brand alignment. In aggregate, while it is early days and will take time, we are very optimistic about the growth potential for MotoGP. One perspective on the potential opportunity is in reference to F1 on several engagement and financial metrics. For example, F1's audience in both race attendance and cumulative TV viewership is roughly double that of MotoGP, yet F1 monetizes its primary revenue streams at roughly five to ten times those with sponsorship and hospitality at the high end of that range. These monetization opportunities, again, will take time, but we believe there is significant potential to scale and grow the business. We'll look forward to updating you on our progress as these initiatives develop. Now I'd like to welcome Carmelo to make some remarks on MotoGP. I have gotten to know Carmelo and his team over the past few months and have tremendous respect for the sport that he has built. His passion is second to none, and I will now turn it over to Carmelo so you can hear it from him directly.
Good morning, and thank you, Derek. We are very excited that the transaction has closed, and we can now begin our partnership with Liberty Media. Liberty's track record with Formula One is well known, and the acquisition has already led to increased interest in our ecosystem. We look forward to benefiting from Liberty's expertise as we continue to accelerate the sport's growth and expand its reach to a wider audience, growing value for our fans, teams, commercial partners and investors. The 2025 season has been very strong. We have held 12 races through the first half of the season and have seen driving competition and great engagement from our fans. We have had five riders and four teams win and 11 riders across eight teams on the podium, including our spring races. The concession system in our sport is designed to drive more competition across the grid, giving lower ranking manufacturers more testing opportunities to improve their technology quicker. This new system, which was put in place last year, is clearly having a positive effect, which we expect to continue. Through the first half of the season, attendance is up six percent on a like-for-like race basis. Notably, Le Mans set the highest attendance ever from the MotoGP championship since records began in 1995 for the third year in a row. Looking at recent races, the Italian Grand Prix saw attendance up to six percent and set a new circuit attendance record and the Dutch and German Grand Prix achieved record attendance at their circuits for the second consecutive year. From a viewership perspective, we have 38.2 million average TV viewers through the first 12 races of the season, and engagement has been also very strong across digital channels, including our direct-to-consumer product, VideoPass. Social media followers reached almost 60 million, growing six percent year-over-year. Our new brand identity launched at the end of last year and our first ever season launch event that we hosted in February are resonating with fans as we continue to showcase MotoGP as a leading global media and entertainment brand. Our management team is looking forward to getting to know our investors and analysts audience over the coming quarters and to sharing our incredible sport with all of you. Now I would like to turn the call back to Derek.
Thanks, Carmelo. We are thrilled to have you and your team on board and are looking forward to further showcasing the MotoGP asset in due course. Now I'll turn it over to Brian for more on Liberty's financial results.
Thank you, Derek, and good morning, everyone. At quarter end, Formula One Group had attributed cash and liquid investments of $3.1 billion, which includes $1.8 billion of cash at Formula One and $70 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 the OpCo level, leaving $525 million at the corporate level. F1's $500 million revolver is undrawn. The MotoGP acquisition closed on July 3. Liberty acquired 84% of MotoGP with management retaining a 16% ownership stake. Pro forma for the transaction, F1 OpCo had approximately $380 million of cash and $3.4 billion of debt, bringing pro forma leverage to 3.3x compared to 0.7x reported as of June 30. Formula One Group Corporate had pro forma cash of approximately $480 million and no change to the debt balance. Shortly following transaction close, we launched a refinancing at MotoGP that is expected to close later in August. We priced approximately $230 million of new Term Loan A denominated in U.S. dollars, a new EUR 800 million Term Loan B, and a new EUR 100 million multicurrency revolver with future reductions in margin expected as the business delevers. This new capital structure will result in significantly reduced annual interest expense, extended maturities and a currency mix that better reflects the euro and U.S. dollar exposure of the business. Using June 30 balances, exchange rates as of that date and pro forma for the refinancing transactions as 5.2x. In the near term, we expected to delever both at Formula One and MotoGP. Our goal is to delever to the 3 to 4x range of the MotoGP business by the end of 2026. Turning to the F1 business. I'll make some brief comments on the second quarter, but we'll focus primarily on year-to-date comparisons, which better reflect the state of the business given variability in quarterly race numbers and mix. A reminder that every quarter in 2025 will have a different race count and mix, which will impact quarterly comparisons. Most of the variability in Q2 year-over-year results is due to one additional race held in the mix of events in the second quarter compared to the prior year period. Q2 '25 held nine races compared to eight races in '24, with Bahrain and Saudi Arabia occurring in the current period compared to China in the prior year period. Year-to-date, though, through the second quarter, F1 had the same race count and mix year-over-year. The business is performing incredibly well with revenue up 14% and adjusted OIBDA up 21%. Revenue grew across all revenue streams with sponsorship, race promotion and media rights continuing to benefit from new partners and underlying growth in the existing contracts. Media rights also continued to see strong F1 TV growth and recognized one-time revenue associated with the Apple F1 movie in the second quarter. Other revenue increased primarily driven by higher freight, hospitality and licensing revenue, including the success of the new LEGO partnership. Adjusted OIBDA increased on a year-to-date basis with revenue growth outpacing increased expenses. Other costs of F1 revenue increased primarily due to higher freight costs from the mix of routes flown as well as higher hospitality costs, primarily driven by increased Paddock Club attendance and higher commissions and partner servicing costs, including increased costs to service new sponsorship agreements. SG&A expense increased year-to-date, primarily due to higher marketing and personnel expenses. Marketing expense was impacted by the O2 launch event that occurred during the first quarter and team payments increased due to the pro rata recognition of expected higher team payments for the full year. Team payments as a percentage of pre-team share adjusted OIBDA were 58.4% year-to-date compared to 61.9% in the prior year period. A quick reminder that team payments should be analyzed on a full year basis due to quarterly fluctuations in team payments as a percent of adjusted OIBDA. Reminder that team payments as a percent of pre-team share adjusted OIBDA were 61.5% for full year '24, and we continue to expect to see leverage against the full year '24 percentage for the full year of 2025. Turning briefly to MotoGP's results. A reminder that since the transaction closed on July 3, MotoGP results will not be consolidated until the third quarter. All financial information for the business to date has been in Spanish GAAP, and we expect various U.S. GAAP adjustments, including the removal of straight-line revenue and cost recognition for multi-year contracts. Under U.S. GAAP, we expect growth rates for primary revenue streams with multi-year contracts to more closely approximate the annual escalators included in the contracts, obviously, absent the impact of any significant renewals, which will differ from the relatively flat Spanish GAAP representation included in our financial disclosure to date. We expect to provide results for the full year 2024 in U.S. GAAP at year-end as part of our normal reporting. More information can be found in the information pack on MotoGP that was posted to our website at the time the acquisition closed and a table summarizing June 30 year-to-date results in Spanish GAAP can be found in a trending schedule that will be posted to our website after the 10-Q is filed. MotoGP held ten races in the six-month period ended June 30, 2025 compared to eight races in the prior year period. Spanish GAAP revenue and EBITDA were EUR 220 million and EUR 75 million, respectively, for the six months ended June 30, 2025. Year-over-year comparisons are impacted by the mix of races as flyaway races in general carry a higher cost per race. For the full year 2025, we expect a normalized race calendar unlike 2024, which was impacted by several race cancellations. Note that the second half of the year contains a higher mix of races with greater profitability. The majority of MotoGP's revenue and costs are euro-denominated. Going forward, we intend to provide both U.S. dollar and euro-denominated growth rates to better portray underlying trends in the business. Lastly, looking briefly at the Corporate and Other results year-to-date. Revenue was $198 million, which includes Quint results and approximately $12 million of rental income related to the Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA loss was $4 million, includes Grand Prix Plaza rental income, Quint results and corporate expenses. As a reminder, Quint's business is seasonal with the largest and most profitable events taking place in Q2 and Q4. Turning to the Liberty Live Group. There's attributed cash of $308 million and $400 million of undrawn margin loan capacity related to our Live Nation margin loan. As of August 6, the value of the Live Nation stock held at Liberty Live Group was $10.4 billion. We have $1.15 billion in principal amount of debt against these holdings. Liberty and F1 are in compliance with our debt covenants at quarter end. And with that, I'll turn it over to Stefano to discuss Formula One in more detail.
Thanks, Brian. It continues to be an incredible season as we head into a well-deserved summer break for our F1 community. We've witnessed a thrilling competition and on-track action that shows everything Formula One represents. Several drivers across the grid have stood on the podium this season, demonstrating the depth of talent across the grid. What is equally impressive is our competitive midfield battles. Every single team down to 10th place has scored meaningful points this season. I'd like to take a moment to congratulate Nico Hülkenberg on achieving his first podium at Silverstone, a moment that perfectly captured the unpredictability and human stories that make F1 so captivating. Our fans are showing up in larger numbers than ever with impressive engagement across metrics. Attendance has been solid with nearly all events operating at capacity. Twelve of the past 14 races sold out and six races set new attendance records, including Silverstone, welcoming close to 500,000 fans over the four-day weekend. At the Paddock Club, we've sold 28,000 tickets season to date through Hungary. Early forecasts based on advanced partner requests are already indicating strong demand for 2026. Looking at TV viewership for the '25 season, nearly every race is showing healthy growth in year-over-year live viewership across F1's top 15 markets. Key large European markets have seen robust growth, including Germany, the U.K., and France as well as our non-European markets like the U.S., Australia, Canada, and Brazil. In the U.S., in particular, live viewership is up 7% season to date compared to last year, and ESPN has seen seven races set viewership records for their events. Our additional race content is benefiting total viewership, with live audiences for the Sprint race in Miami up to 25% year-over-year, attracting the largest U.S. audience for Sprint race since the format was introduced in 2021. Perhaps even more impressive is our traction on digital and social platforms. Viewership of F1 highlights on our YouTube channel grew 30% compared to last year, and over half of this audience is under 35. Our social media followers reached 106 million, growing over 20% year-over-year, primarily driven by TikTok, Instagram, and YouTube. F1 remained the fastest-growing major sport property on social platforms. Driven by both an exciting season on track and cultural buzz around the F1 movie, F1 drew its largest reach ever on social media in the second quarter with over 20 billion total social impressions, growing over 100% compared to the second quarter of last year. In June, the F1 movie was released to the world. The movie was the largest global opening weekend ever for a Brad Pitt film and was shown on more than 44,000 screens across 80 markets. In its first five weeks, the F1 movie saw global box office sales over $500 million, becoming the highest grossing Apple film to date. The film will be released on Apple TV later this year and will continue to strengthen fan engagement with our sport. It's worth emphasizing the scale of our total global fan base. As Nielsen reported earlier this year, the F1 fan base reached a record number of 826 million in 2024, 43% of these fans are under 35 and 42% of our fans are female, the highest share in F1 history for both segments. Additionally, we recently published results from a global fan survey conducted by Motorsport Network. 27% of the survey respondents were under 24 years old, and half of these were female. 75% of the fans who became interested in the sport in the last year were female. Importantly, for our commercial business, one in three fans are more likely to consider a purchase if it is from an F1 partner. We will continue to cultivate this fan base in creative ways to interact with Formula One races on non-race weekends alike. Growth in our fan engagement has translated to strong interest from commercial partners, generating continued financial strength. In our race promotion business, we renewed the Austrian Grand Prix through 2041 and the Canadian Grand Prix through 2035, reflecting the confidence our partners have in F1's value and growth trajectory. We also announced our '26 calendar. We are excited to welcome Madrid to the F1 family as a new race beginning next year, 2026 marks the final lap for Zandvoort, and we are tremendously grateful for all our promoter has done to delight fans since their return to the calendar in 2021. We look forward to welcoming one of the numerous interested nations and cities to this slot in 2027 and beyond. The '26 calendar also advanced our continued improvement in the geographic flows of races with the Canadian Grand Prix now following Miami, driving expected freight efficiency and consolidating our European races into one unbroken run over the summer months. For the Las Vegas Grand Prix, we are very happy with the progress made so far this year. Our ticket sales are trending ahead of last year, driven by higher sell-through rates. We have agreed to contract extensions with all our founding partners and are working to secure long-term procurement contracts to reduce future build-out costs. We and our partners see the incredible value of this race as we continue to build it for long-term success. Turning into media rights. We are finalizing contracts in several regions, including Japan, Australia, Pan-Asia, Mexico, and Latin America. We continue to make progress on our U.S. media rights agreement and are confident in our attractive position in the U.S. market. Nielsen reported the American fan base grew over 10% to 52 million fans in 2024, and the U.S. remains our largest market on social. We continue to focus on securing the ideal partner to support our broader commercial strategy for continued growth in the U.S. market. In Brazil, we have secured a return to Globo TV for 2026, who previously held our rights for 40 years. This platform has the largest share of the total viewership in Brazil and commands over 50% of the free-to-air broadcasting market. Additionally, alongside our race promotion renewal in Canada, we also contracted a long-term extension to Bell Media's media rights deal. F1 TV continues to outperform our expectations, with especially robust growth in the U.S., UAE, Canada, Brazil, and Sweden and with the new premium tier offering seeing strong uptake. Our sponsorship was entering 2025 with high visibility into our pipeline, and I'm very pleased with the significant new partnership activity we have announced. MSC Cruises extended as our global partner through 2030, and we welcome Pepsi as an official partner, bringing their powerful portfolio, including Doritos, Gatorade, and Sting Energy into the F1 ecosystem. With this incredible success benefiting our 2025 results, our team is now focusing attention on our pipeline for 2026 and beyond. I'm confident in our progress on several high-value renewals and new partnerships that will drive continued growth. On our other revenue stream, looking first at the Paddock Club, we continue innovating our premium hospitality product, including leveraging key learnings from Las Vegas to diversify and enhance this experience. We were excited to announce House 44, a partnership with Lewis Hamilton, Soho House and F1 that we launched at Sixth Circuit this year, beginning in Silverstone. We believe there are additional innovative products to come. Licensing remains a continued area of focus and growth. F1's new partnership with Disney is the latest example of our effort towards F1's always-on strategy, bringing F1 into the lives and homes of our fans beyond 24 races a year. We will deliver a 360-degree licensing program with Mickey and friends across consumer product categories, retail, trackside activation and experience and are thrilled to launch this partnership in 2026. Our LEGO partnership also continued to show strong growth and generate buzz on social. LEGO marketing activation hit over 21 billion in reach this year. Across our consumer product business, our partners sold 12 million units of product in Q1. In 2026, we will see a number of new licensed products launching across soft and hard lines. In experiential licensing, F1 Arcade globally welcomed over 200,000 guests through its doors in the second quarter alone. The third year venue in Philadelphia opened at the end of May and Denver, Las Vegas, and Chicago will open in the fourth quarter. We are also pleased to report that the F1 exhibition has now surpassed 1 million tickets sold. Turning to Grand Prix Plaza. The new activation launched to the public in May capitalized on the F1 brand to promote the site as a primary destination in Las Vegas. The venue has welcomed visitors from 72 different countries since opening. We believe our karting operation is now the second highest grossing track in the country, exceeding 1,000 riders a day on the weekends with strong and growing revenue per person. It is, however, still early days and the overall revenue contribution is modest. And finally, we hope many of you saw our F1 75th motion activation, marking 75 years of F1 through a vintage-inspired premium pop-up at Luxury Retail Selfridges in London. Originally planned as a 2-week activation, it was extended due to exceptional demand. Finally, on sustainability, in July, we published our 2025 update, highlighting our continued commitment to sustainable growth and progress to date. We achieved a 26% reduction in emissions in 2024 versus our 2018 baseline, ahead of internal expectations. This achievement is particularly noteworthy against the backdrop of more races and bigger events, demonstrating that we can grow sustainably while expanding our global footprint. As we look ahead, Formula One's momentum across every dimension of our business positions us well for the continued growth. The foundation we are building today will drive long-term value creation for all our partners and stakeholders. Avanti Tutta, full speed ahead. And now I will turn the call back over to Derek. Ciao. Thank you.
Thank you, Stefano, and thank you, Brian. Before going to Q&A, I want to remind you to save the date for this year's Liberty Media Investor Day. We will be hosting our Investor Day alongside the inaugural F1 Business Summit on Thursday, November 20, in Las Vegas in advance of this year's Grand Prix. We will have limited in-person attendance, but the Investor Day will be webcast. Stay tuned for more details. We appreciate your continued interest in Liberty Media. And now we would like to take questions.
分析師問答
Our first question comes from David Karnovsky with JPMorgan.
For Derek or Stefano, obviously, there's been a lot in the press on the U.S. media rights. Maybe you can update us on where things stand with the process. How are you thinking about priorities in terms of reach versus payment? And what role might F1 TV play?
Derek, if I may, I can start, if it's okay for you.
Yes, absolutely.
Thanks, David, for the question. I think that, as you said, I will start from the last of your remarks. F1 TV is and has to be, and it will be part of the package of what we are negotiating now into the future. This is absolutely relevant because, as you have seen, David, the numbers are growing. There is an incredible opportunity for us to stay connected with our, let's say, fan base that is maturing and is growing in terms of attention in terms of knowledge. And of course, the discussion we are having is in a good place because we believe that we are, as I said, very, very good opportunity to keep the momentum that is very strong in U.S. And just I think yesterday, there will be the indication that this year, we were over 1 million followers on the races in U.S. that is really great. So we are progressing our negotiations. Of course, there are weeks in front of us. We have not a great rush to finalize everything because we want to make sure that, as you said, we find the right solutions. One thing that I definitely can add is we are looking for, I would say, mid-term, not long-term, mid-term agreement because we believe that we are still in a position that our growth will have the chance even further to be negotiated better in the future. But everything is looking good. And the balance is definitely important, as you said, between reach and awareness. But we believe that everything is progressing according to our plan.
Thanks, Stefano. And I would just add that as we continue to look at the U.S. market, we are very pleased with the progress we've made over the last few years with the addition of the races that we have here and sort of the engagement that we're seeing, and look forward and the fact that the business has been built in the U.S. and what that's doing to help promote and foster the sort of robust discussions that we're having and look forward to having this next deal take us into the future.
Okay. And then maybe just one on the Vegas Grand Prix, it would be great to hear a bit more about the on-sale process for the year, how the strategy of starting at a lower price point is paying out. And does that plus what you could do on expense management, I don't know, inform any view on the ultimate kind of contribution of the race to the financials for the year?
I can confidently say that the progress in Vegas is going very well according to our plan. In response to your question, we have definitely implemented some changes compared to last year, which was the first year of this experience. We started with a pricing strategy that is very clear and consistent, with no decreases. This clarity has been a significant part of our approach, and the packages we sold align with this strategy. We firmly believe that from this year onward, the contribution of the Vegas Grand Prix will be substantially greater than what we've seen in the first two years.
Yes, I want to give a big shout out to Stefano and the entire F1 team, as well as the LVGP team, for their impressive progress this year. At the beginning of the year, we discussed what needed to be accomplished on both the expense and revenue sides. As Stefano mentioned earlier, we have secured agreements with our partners in Las Vegas. I was just there a couple of weeks ago, and the excitement about the race and our plans for the future is very evident, putting us in a strong position moving forward.
Our next question is from Bryan Kraft with Deutsche Bank.
Brian, I was wondering if you could help us to quantify the contribution from the F1 movie to primary revenue so that we don't all end up overestimating the revenue that's going to be recurring? And then secondly, how will the MotoGP management team 16% ownership be accounted for, both in terms of the income statement and the share count?
Yes. So on the F1 movie, think of it as a mid-teens number for the quarter that's one-time in nature on revenue. And then I'll answer your MotoGP question, but then I would kick it over to Stefano after that to really talk a bit more about the benefit of the F1 movie to the overall ecosystem. But quickly on MotoGP, the 16% will be accounted for as a non-controlling interest. So you'll see a big amount on our balance sheet above equity. And then we'll pick up 84% of the earnings of the business through the P&L. The other 16% will be allocated to non-controlling interest. Stefano, do you want to comment on F1, the movie?
Yes, absolutely. I mean thanks, Brian. And Brian, I would say the effect of the movie is not only, of course, about the dollars and the economical impact, but the sport will have an incredible opportunity to grow its awareness and to generate, I would say, the circular economy around that, because it's a new product that has been incredibly strong. And actually, why we were, in a way, quite positive about the impact in the U.S. was fascinating to see the impact on the more mature markets. So these things will generate definitely interest, will definitely bring money to the ecosystem, to the teams, to the F1 stakeholders. So that's really what we can see happening. If you think that after just a couple of weeks, the movie itself brought more than $500 million at the box office, it's something that keeps you the amount of interest that is generated. We don't have to forget that this movie will be out on Apple platform later on at the end of the year. So that momentum will have a longer effect that will definitely create interest that can be monetized later on into all the systems that are around Formula One.
Our next question comes from Stephen Laszczyk with Goldman Sachs.
One on MotoGP and one on F1 from me. Maybe first on Moto, I think it's clear that you see a lot of opportunity to improve the reach and monetization of the sport. I think it's also pretty clear that you expect a period of investment and repositioning to play out over the next couple of years. So I would just be curious if there's maybe any early frameworks or thinking around how investors should expect the pace of investment to be matched against the pace of execution against the revenue opportunity and really what that means for the trajectory of profitability for the business over the next few years? Any thoughts or frameworks there, I think would be helpful. And then a quick one just on hospitality at F1. You called out in the press release and I think in the prepared remarks, the strength you're seeing there. Is there any way to maybe elaborate more on the drivers and magnitude of that growth? And if we were to look at comparable GPs year-over-year in the quarter, what types of growth we're seeing from Paddock and hospitality?
Okay. This is Derek. Let me start by saying that regarding MotoGP, you're absolutely correct that there is a lot of opportunity here. While not many people know who the drivers are or much about the sport, we believe we have a solid foundation to build upon. Therefore, we see investment potential in MotoGP similar to F1. We plan to invest, though it might not be a significant amount, as our goal is to accelerate growth and explore opportunities. I’ll let Carlos Ezpeleta from MotoGP provide more detailed insights on this, and then we can return to the hospitality question.
Thank you, Derek. Yes, we see growth essentially divided into two areas. The first is how to better monetize our current fan base and business. The second, where Liberty can be particularly beneficial, focuses on expanding our fan base globally. This can be achieved through content, storytelling, and strategically developing different markets, all aimed at growing our fan base. I must mention that our investment in this area began before the operation of Liberty Media and involved hiring key personnel in commercial and marketing, as well as investing in fan insights and research roles. This has already started to yield potential increases in the business. However, we believe the primary driver of growth will be increasing our global fan base. As Derek mentioned, we have significant opportunities to showcase the sport and its riders, and we anticipate this will be the main catalyst for growth.
Great. Thanks, Carlos. I think as we come back to the question on hospitality, Stefano, if you want to give your thoughts on that, that would be helpful.
Absolutely. Thank you, Derek. Thank you, Stephen. First of all, I can confirm that demand remains very strong. We are ensuring that we offer a variety of products to meet the needs of our partners and fans. Additionally, having amazing partners who can activate their investment through hospitality packages allows us to emphasize the importance of maintaining quality while also exploring opportunities worldwide to expand our hospitality offerings in line with demand. This is crucial. We are currently negotiating and discussing with promoters to assess the demand and grow our quantity while maintaining our quality standards. We have been diligently working over the past few years to ensure that our hospitality programs provide pure entertainment, offering a unique experience to the fans attending the event. This has been recognized as something special compared to other entertainment sectors, and this is where we are concentrating our efforts. Therefore, while we aim for increased quantity, quality remains a top priority in what we provide for our fans.
Yes. I mean a great example of that is this past weekend's race in Budapest, where they just unveiled a whole new Paddock Club facility, which is larger and certainly much more upgraded than previously, which speaks to both quantity and quality that Stefano just referenced.
Our next question comes from Ben Swinburne with Morgan Stanley.
I have a question about MotoGP, and then I want to ask Stefano about sponsorship. The last update we received from the deal deck, Brian or Derek, was in 2023, and it was for about EUR 480 million. I'm interested to hear how the business has performed from a top line perspective as we move through 2024 and your expectations for 2025. I believe you have more races scheduled this year than in previous years, which might help us understand growth rates. Additionally, Stefano, in your remarks, you mentioned that the sponsorship team is focusing on 2026, and you sounded optimistic about the opportunities. I’m curious whether you believe you can maintain healthy growth in 2026 based on what your team is observing right now.
I will start and have Brian take the first question, then we'll pass it back to Stefano.
Yes, Ben, I would direct you to the information deck available on our website since the deal closure. In that deck, please note that these figures are not based on our numbers. They are presented in Spanish GAAP, not U.S. GAAP, and are in euros. There are numerous disclaimers included, so please review those carefully. With that said, in 2022, we reported EUR 475 million. For 2023, it was EUR 486 million, and for 2024, it is projected at EUR 462 million. The race count remained the same across these years, but we faced cancellations in 2024 that affected expectations, with two cancellations replaced by lower fee races. You will also find the OIBDA numbers in the deck. There were one-time bad debt amounts in 2024. An information pack or a trending schedule will be available on our site later today with year-to-date numbers. Regarding our position for the six months ending June 30, 2025, compared to June 30, 2024, please remember that the mix of races varies. There were ten races in 2025, plus two additional flyaways, versus eight races in the previous year. Flyaways typically incur higher costs, and profitability will vary by race. However, we expect to see a greater profitability mix for the remaining races in the second half of the year.
And then I'll turn it back over to Stefano for the question on sponsors.
Thank you, Derek. You are absolutely correct. I want to emphasize that the momentum we are experiencing is strong, and we believe it will continue. We discussed the movie earlier, which will showcase another aspect of our brand that will appeal to audiences. At this point, given the interesting pipeline we have, it’s essential to maintain balance. We will continue our efforts to ensure quality and progress, enabling us to offer partners greater funding while providing them with less visibility by differentiating between categories. Our collaborations with brands like Barilla, Allwyn, LEGO, Pepsi, and LVMH have fostered an ecosystem that is attracting more interest in various categories, which we are now assessing appropriately. A significant opportunity lies in the betting category, which we need to approach carefully. There are ongoing discussions, and we must make sound decisions, particularly in markets facing legislative constraints. Additionally, the consumer sector presents a promising area for development that has not been a major focus for F1 in the past, but we are intent on securing valuable deals not only for 2026 but for the years to follow.
Our next question comes from Kutgun Maral with Evercore ISI.
I wanted to ask about the outlook for F1 race promotion and maybe just excluding Vegas. I know this year is relatively light, but it seems like you have a number of deals or extensions in 2026 that could really help accelerate growth over there, particularly thinking about Melbourne. So I wanted to see if you could expand on the opportunity you see over there.
Yes, Stefano, I can...
Sorry, sorry?
Go ahead. Go ahead.
Okay. Thank you, Derek. I would say, well, definitely, the positive trend that we see is definitely there because in all the possible opportunities that we have, we have more demand and/or we have the chance to, let's say, work together better with our partners in order to make sure that, as Derek was mentioning before, Hungary has proved to not only Europe, but all the markets that if a country believes in our sport, there is room for investment, room for the right investment for fans, and also the right fees that need to be recognized by the fact that F1 is the business cup for a country and for a culture. Therefore, there are opportunities in front of us. But the other good thing is that for the deals that we have extended with a quite significant term, it's benefiting the fact that there is robust growth in the year to come in order to keep the financial opening to the race as minimum as possible. But definitely, for the windows that we have in front of us, there are a huge opportunity because, as you know, we don't want to move forward in terms of the number of races, even if the request is higher than what we can offer.
The conversations that Stefano and his team have with potential promoters are quite positive, as they engage with a healthy number of individuals interested in discussions. While we do have some limitations related to the calendar, I believe that as we plan for the future, we will find additional options moving forward.
Our next question comes from Peter Supino with Wolfe Research.
I'm thinking about the profit recovery potential in Las Vegas. If memory serves, you have about $600 million of capital invested in Las Vegas PP&E. And understanding and appreciating that the LVGP has benefited the entire sport, is that original capital investment something on which Liberty realistically expects to earn a stand-alone return on capital that's better than your WACC?
Yes, our goal is definitely to earn a return on that investment. As you mentioned, and we've pointed out several times, we are increasingly moving away from analyzing the stand-alone economics of Las Vegas. As the city continues to grow and develop, and as we collaborate with partners in that market, there are benefits to the overall ecosystem, some of which are intangible, but many are quite tangible. So, overall, we certainly aim to earn a return on that investment.
Our next question comes from Joe Stauff with Susquehanna.
I wanted to ask if there's anything you could share with us on MotoGP and just, say, the expiration schedule for the existing race promoter contracts that you have? And then the second question is on the new race promoter contracts within F1 you announced in Canada and Austria. Is there any sense you can give us on kind of like the average growth that you'll realize over the period? Or any delta you can share with us, please?
Yes, this is Derek. Regarding the first question about race promotion at MotoGP, I'll have Carlos provide more details shortly. There is a regular schedule of renewals for our new races that we announced earlier, including the Buenos Aires race and the returning race in Brazil. Now, I'll hand it over to Carlos to give a bit more insight.
Thank you, Derek. We're pleased to report that promoters represent one of the fastest-growing segments for the sport at the moment. There is significant interest from new countries wishing to join the calendar, and we do have the capacity to accommodate them even with our agreement limiting us to 22 races. Currently, we have four races in Spain and two in Italy, along with other events that could be swapped out to introduce new markets. This year, we have confirmed that Buenos Aires will join the MotoGP calendar in 2027, and Brazil will make a return after 20 years. Both locations are set to replace events with considerable increases in fees. Additionally, we have renewed agreements with events in Spain and France, which have also seen significant fee hikes. We are witnessing a strong demand from new countries eager to participate. Given our partnership with Liberty, we must approach this strategically and ensure we have room on the calendar for both new and existing markets. We are observing a growing frequency of contract renewals, with countries and promoters looking to extend their agreements, typically for five years, though some are now extending up to ten years.
Great. Thanks, Carlos. I think on the F1 question with respect to the two recent renewals, we're not getting into the details of what those renewals are. But that being said, both of these are important markets for the F1 calendar and also bring other components to it, including the media rights renewal in Canada, but I'll let Stefano articulate that in a bit more detail.
Thank you, Derek. I want to assure you, Joe, that the changes are definitely positive, not just in terms of financial impact but also for the ecosystem. Each Grand Prix promoter has unique considerations to take into account. For instance, it's important to acknowledge the significant impact that Red Bull's investment has on the F1 ecosystem. On the other hand, Canada has always been a key market for us, but it required their investment to create a conducive growth environment. The new facilities and expanded Paddock Club, along with new grandstands for fans, will enhance profitability both for the promoters and for us as the commercial rights holder. Everything is being carefully considered, recognizing that each situation is unique. Overall, there is strong support for our approach because stakeholders see the benefits for themselves as well. We generate business opportunities wherever we operate and create interest, as everyone utilizes F1 to showcase what goes into the race. It's about more than just attendance; it's about fostering an ecosystem that inspires technological innovation and helps countries achieve their goals by hosting a Grand Prix. In summary, the changes are positively impacting every market we enter.
Our last question comes from Ryan Gravett with UBS.
With the MotoGP deal closed and the split coming, I was just wondering if you could provide an update on capital allocation plans and priorities from here. I know you talked about getting to 3 to 4x at MotoGP, but how should we think about the right target leverage at the F1 OpCo level and just your general thoughts on share repurchases.
Yes. Thank you for the question. As you mentioned, we are currently reducing our leverage. Once we reach a level of leverage that we are comfortable with, we will continue to explore opportunities in the marketplace, which has always been part of Liberty's approach. From an M&A perspective, we will maintain a high standard and discipline regarding what we consider and invest in. This will evolve as we move forward, and it is definitely a topic we will keep discussing.
Our next question comes from Steven Cahall with Wells Fargo.
First one just on F1 TV. I'm wondering if you've done any assessment of those subscribers. It seems like maybe some are super fans, some are cordless, definitely some could be both. But as you contemplate maybe moving to a streaming partner for some of your rights, do you worry that there's any cannibalization risk of the folks that are cordless and just may be able to find that content for the subscription that they already have? And then a second one, just on competitive balance. I was wondering if you could talk if there's anything new in the Concorde agreement around this. We have another F1 season where six of the ten teams aren't really racing for championships or podiums. I was wondering if there's anything in the new Concorde that might balance that better over time. I know you have some financial controls in there, but it hasn't yet moved out of the steering effect that you've got in the field.
Yes, I'll start. Stefano, I know you enjoy discussing competitive balance, so I will let you take that part. Regarding the first question about streaming platforms and F1 TV, the reality is that in today's world, it's not just a matter of choosing one option over another. The goal is to make content available to consumers and fans wherever they want to engage with it. Therefore, the overarching aim is to provide content in as many accessible locations as possible for consumers and fans. Now, I'll hand it over to Stefano.
Thank you, Derek. When discussing competitive balance, it's important to view F1 over multiple seasons. Remember, just two years ago, McLaren, currently leading the championship, finished last in the first Grand Prix. The introduction of the budget cap and the time reduction for winning teams in the wind tunnel has made a difference. The performance gaps between teams have never been smaller. Hence, we have no concerns about these assets. I believe that the model established in the Concorde Agreement is fair, as it takes into account various factors to avoid any perception of unfairness. More attention is being drawn to how success can lead to financial rewards, while on the sporting side, we're focused on creating the right content through sporting and technological regulations to keep the competition tight. This collaboration with the FIA is essential for achieving that balance.
Our last question comes from David Joyce with Seaport Research Partners.
I wanted to ask about MotoGP. You already discussed the race promotion cadence, but could you explain the typical duration of the media rights contracts and what might be expiring in the next 12 to 18 months? Additionally, regarding sponsorship, I know that's a growth area. What are some typical contracts in that space, and how would those be renewed?
Thanks for the question. As we are thinking about sort of both of those categories, clearly important pillars of our revenue and our growth. And as I think Carlos, we spoke about earlier in terms of sponsorship and sort of that area, we do see a huge amount of opportunity there. We do think it's a long build just because we've got to sort of tell the story, get the potential sponsors and people bought into what we are, what we can do for them. And just like we saw with F1, that will be something that happens over time. On the media rights, we do have a variety of deals coming up, as you might imagine, over the course here in the next several years. I will let Dan speak about that in a little bit more detail. But again, I think the goal there is probably to broaden the reach and continue to sort of build the brand of MotoGP in the conscious of sort of the general market. So that's sort of where we're pushing. But Dan, why don't you take that? Dan Rossomondo, Chief Commercial Officer at MotoGP.
Thank you, Derek, and thank you, David, for your question. I will begin with the media aspect. One of the strengths of our sport is its global nature, which means we need to be relevant and secure the right media agreements in various countries. In every location, our goal is to achieve the best and most comprehensive distribution. As Derek mentioned, our agreements do have different cycles. It's also crucial to adapt to the changing habits of today's consumers regarding where and how they watch content. We are continually exploring potential new distribution methods and aim to maintain flexibility in our agreements to accommodate those changes. On the sponsorship front, we believe there is significant growth potential. We have invested considerable time and money over the past year in enhancing our brand identity, business analytics, and marketing team to better tell our story and draw new brands into our ecosystem. We have a range of partners within the industry and some excellent non-endemic partners, but we need to develop this aspect of our business further. Our goal is to become more appealing to brands interested in collaborating with us. We want sponsors to connect with our riders and establish long-term relationships with brands that share our vision and are effective marketers, so they can aid in growing our business and attracting more fans. That's our current position.
Thank you, Dan. And I think that's our last question. I want to thank and welcome Carmelo and Carlos and Dan. Thank you guys for your participation. Thanks, Stefano, and thank you to everyone who joined the call today. We appreciate it and look forward to speaking again soon.
This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.