Liberty Media Corp
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Liberty Media Corp
Earnings Call Analysis
Q3-2024 Analysis
Liberty Media Corp
In the recent earnings call, Liberty Media’s leadership made significant updates regarding corporate governance and strategic decisions. Notably, the successful merger between Liberty SiriusXM and SiriusXM was completed on September 9, 2024, marking a pivotal restructuring for the company. This merger allows Liberty to focus more directly on its core businesses without the constraints of tethering to SiriusXM, paving the way for a more agile operational structure. Additionally, updates were provided regarding the Atlanta Braves Holdings as they transition to a stand-alone company, which signifies Liberty’s strategic focus on enhancing its independent asset governance.
Turning to the Formula One Group, the organization showcased impressive financial performance during 2024, with revenues soaring by 15% and adjusted OIBDA (Operating Income Before Depreciation and Amortization) increasing by 21%. This growth reflects a robust demand for Formula One as interest in the sport continues to rise. The competitive nature of the current season has contributed to heightened fan engagement, signified by record attendance at several races. Attendance figures reflect a broader trend of increased interest, with 2.9 million attendees year-to-date, representing a 9% rise in like-for-like races.
Liberty Media is anticipating strong growth in sponsorship revenue, particularly looking ahead to 2025, where several new commercial agreements are set to take effect. Expectations indicate a banner year for sponsorships, buoyed by the increasing brand partnerships with high-value entities like LVMH and American Express. The CEO, Greg Maffei, expressed confidence regarding the evolving pipeline for commercial activity into 2026, suggesting continued momentum and interest from the market. Liberty's proactive approach to nurturing these partnerships positions the company favorably for sustained revenue streams.
The current fiscal quarter saw adjusted OIBDA margins increase from 24.4% to 25.8%, highlighting effective cost management strategies within the Formula One Group. Team payments, an essential aspect of the operational budget, represented 62.2% of pre-team adjusted OIBDA through Q3, down from 64.6% in the previous year. This improvement might be indicative of enhanced revenue management practices, allowing the company to optimize its financial allocation while managing expected increases in team payments for 2024.
Liberty Media is strategically managing its financial leverage and debt commitments, having refinanced its Term Loan B, reducing the margin from 2.25% to 2%, with further potential reductions contingent upon leverage targets. The firm has also secured incremental funding for its MotoGP acquisition, indicating confidence in its future cash flow generation capabilities. As of Q3, total debt attributed to the Formula One Group stood at $2.9 billion, with leverage currently at 1.1x, showcasing a stable debt position relative to its operational performance.
The Las Vegas Grand Prix is viewed as a transformative event for Liberty Media, with expectations to boost both revenue and fan engagement significantly. Although aggregate ticket revenue is projected to decline from initial budgets due to pricing adjustments, the focus remains on maximizing profitability and enhancing the overall event experience. The company plans to introduce interactive experiences and package offerings to attract new audiences and engage existing fans more deeply, leveraging the unique appeal of Las Vegas as a vibrant destination.
Looking forward, Liberty Media is preparing for potential negotiations for media rights in the U.S. market as the existing contract with ESPN approaches its conclusion in 2025. This is a pivotal time as streaming becomes a more significant component of sports media rights. Management indicated their intention to strike a balance between economics and fan accessibility, emphasizing a willingness to explore options that enhance both revenue and viewer engagement. As new contracts may influence the overall financial strategy, this area will be critical to monitor.
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Welcome to Liberty Media Corporation's 2024 Third Quarter Earnings Call. [Operator Instructions]. As a reminder, this conference will be recorded, November 7. I would now like to turn the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead. .
Thank you. Good morning. Before we begin, we'd 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 statements 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 one can be found at the end of the earnings press release issued today, which is available on our website. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.
Thank you. Good morning. Today speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali; and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling.
So let me start with a couple of corporate updates. As you may recall, we completed the LSXM, SIRI merger on the ninth of September. I look forward to remaining involved as Board Chair and a shareholder at SIRI, but Liberty's ties are cut. We also announced updates to our voting and governance at the Atlanta Braves Holdings, and we are transitioning services directly to the Atlanta team. They held their earnings call yesterday, this is the next step in their evolution as a stand-alone private company, and I want to thank all the Braves management team for their partnership over the years that's been so fruitful.
Now let me turn to the underlying businesses, beginning with the Formula One Group and looking it from some corporate update perspective. We refinanced the F1 date. The term loan B was refinanced at silver plus 200 bps. We expect to step down to SOFR plus 175 bps upon the deleveraging post the MotoGP transaction. We raised an incremental $850 Term Loan B and $150 million Term Loan A commitments to fund that MotoGP transaction. All of that is deal contingent.
We also issued $949 million of [indiscernible] shares, replacing the equity consideration to the sellers in the transaction, so we'll directly pay them cash. We issued that stock at only a 4% discount to the market price, and it was placed with long-term holders. That completes -- those transactions complete the necessary funding for our MotoGP acquisition. And we expect F1 leverage to be between 3.5 to 4x, assuming a year-end close on that Auto GP deal. The F1 season itself remains highly competitive, both the constructors and drivers championship for coming down to the final races. We've seen also similarly incredible financial performance at Formula One year-to-date with revenue up 15% and and adjusted OIBDA up 21%. We've seen double-digit growth across all of our revenue streams boosted by two additional races. And we benefited from new partners signed contractual uplifts in our contracts and the performance of F1 TV and our hospitality products.
I note we've signed several new commercial agreements, which we begin next year. LVMH and Amex were introduced to F1 through LVGP in terms of their relationship, but now they've become broader partners with F1. We feel that partners continue to be attracted to the growth of the sport in the EOS and our younger demographic, which has also grown. And correspondingly, we feel good about the pipeline [indiscernible] activity in 2026. We all look forward to the LVGP in the coming weeks. We expect it will be another great spectacle for fans attending and watching at home. We will have a free daytime fan experience, which will bring energy and welcome local Las Vegas fans to we expect great entertainment, including [indiscernible], [indiscernible] and One Republic.
Now let me turn briefly and give you a MotoGP transaction update. We are making progress with the European Commission, which is our only remaining regulatory jurisdictional hurdle, and we continue to expect the year-end close. And looking at the underlying MotoGP business. The Valencia race was canceled due to the tragic flooding in that region. Our thoughts were the entire community. We give credit to Carmelo and the management team at motor GP for their quick and thoughtful response. They will pivot such as the final race will be in Barcelona will be hosted there in solidarity with Valencia. And that will be the final race of the season. Various initiatives are also underway there to support relief efforts for Valencia during that weekend.
Other GP racing has continued to be great with only 24 points separating the title fight participants. Attendance is trading well with 2.9 million attendees year-to-date, which is plus 9% on like-for-like races. And six races have set all-time attendance records this year. And looking at the business updates, MotoGP extended its rights agreement with FIM their regulator until 2060. They've announced their 2025 MotoGP calendar with 22 races across 18 countries, and they expect to release a new brand identity post season. We look forward to more exciting racing and Liberty's involvement.
Turning briefly to Quint. As you may recall, Q3 is a seasonally light quarter. We've seen strong F1 experiences during the quarter, and we are also seeing positive movement across MotoGP products that they are selling. Profitability in the quarter was partially offset by softness at a different sporting a get and there was an agreement with a rights holder, which was subsequently terminated by mutual agreement, which impacted our third quarter results.
And just touching on Live Nation. They've had strong performance through the first half despite fewer stadium concerts. They are set up very well for 2025, which will be a monster stadium year. But I won't comment further on results because LYB did not release their earnings until Tuesday. And with that, I'll turn it over to Brian on our financial results.
Thank you, Greg, and good morning, everyone. The merger of Liberty SiriusXM with SiriusXM closed on September 9. Please note that SiriusXM Holdings is presented as a discontinued operation in Liberty's consolidated financial statements. Please also note that due to the timing of the Live Nation release of their reported results, as Greg mentioned, Liberty does not expect to file its 10-Q until Tuesday, November 12.
At quarter end, Formula One Group had attributed cash, liquid investments and monetizable public holdings billion, which is $1.4 billion of cash, about $1 billion and $65 million of cash at Quint. The cash balance as of 9/30 also includes proceeds from the previously mentioned [indiscernible] issuance. 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 $530 million at the corporate level. F1's $500 million revolver is undrawn and their leverage at 9/30 was 1.1x. During the quarter, Liberty entered into additional interest rate swaps and as of quarter end, $2.2 billion -- $2.2 billion of the $2.4 billion of F1 debt was at a fixed rate. In September, F1 refinanced its Term Loan B and extended the maturities of its debt facilities. The term loan A and revolving credit facility now mature in September 29, and the Term Loan B matures in September 2031. The margin on F1's term loan B was permanently reduced from 2.25% to 2% with the potential to step down to 1.75% if certain leverage is met after the MotoGP acquisition closes.
In connection with the refinance, F1 secured incremental funding for the new MotoGP transaction and all acquisition-related financing is now complete. Reminder that we also obtained commitments for an incremental EUR 150 million term loan and an upsized EUR 100 million revolver at Dorna to be entered into subject to the transaction close.
Turning to the F1 business. I'll make comments on Q3, but remind you that the business is best in [indiscernible] on an annual basis given the impact that both the race count and mix can have on quarterly results. During the third quarter, F1 recognized a lower proportion of season-based income with seven out of 24 races or 29% occurring during the period compared to eight out of 22 or 36% in the prior year period. Sponsorship revenue declined due to this lower pro rata revenue recognition, the recognition of sponsorship income varies based on the mix of races during the quarter, including the allocation of title sponsorship and other race-specific sponsorship packages. To a lesser extent, this also contributed to the sponsorship revenue decline for the third quarter.
This was partially offset by revenue from new partners compared to the prior year period. The decline in pro rata recognition of media rights revenue was partially offset by contractual fee increases and continued F1 TV growth. race promotion revenue increased in the third quarter despite one less race being held due to the mix of events year-over-year with Azerbaijan this year compared to Austin -- Austria, pardon me, and Japan last year. Other revenue increased due to the higher licensing revenue and revenue from third-party events at Grand Prix Plaza.
Hospitality and experiences income decreased due to the mix of events in Q3, though note that the [ Patto ]Club is seeing very strong growth year-to-date. Adjusted OIBDA grew in the quarter due to the lower pro rata recognition of team payments partially offset by the expectation of increased team payments for the full year over 2023. Team payments represented 62.2% of pre-team adjusted OIBDA year-to-date through Q3 compared to 64.6% in the prior year.
Reminder that Q2 and Q3 tend to have the highest percentage payout ratios based on the greater mix of European races. We continue to expect slight leverage on team payments for the full year '24 relative to our year-to-date payout as a percent of pre-team share win. It's consistent with the message we communicated on our Q2 call.
Other cost of F1 revenue and SG&A should be viewed as a percent of total revenue. And looking on a year-to-date basis, the adjusted OIBDA margin improved from 24.4% to 25.8% through Q3 '24.
Looking briefly at Corporate and other results in the third quarter. Corporate and other revenue was $70 million, which includes Quint results and approximately $7 million of rental income related to the Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA loss was $14 million and includes Grand Prix Plaza rental income results and corporate expenses. Quint results in the third quarter were primarily driven by F1 experiences across the seven races held note that Q3 is a seasonally light order for Quint.
Turning to the Liberty Live Group. This attributed cash of $388 million. There's $400 million of undrawn margin loan capacity related to our Live Nation margin loan. As of November 6, the value of the Live Nation stock held at Liberty Live Group was $8.8 billion. We have $1.2 billion in principal amount of debt against these holdings. In August, Liberty issued a redemption notice for all of its 0.5% Live Nation exchangeable debentures. Approximately $12 million of the debentures were redeemed and settled in the third quarter, and the remainder were exchanged by holders in September but did not settle out until October. The $50 million remaining debentures that settled in October was funded with cash on hand. Liberty and F1 are in compliance with their debt covenants at quarter end. And with that, I'll turn it over to Stefano to discuss Formula One.
Thanks, Brian. It's been a fantastic season at. The competition across the grid is captivity notices in the stands and on the screen. We just completed the triple leader in the Americas with amazing action excitement on and off the track. We have a three-way battle for the cost structure championship between Mclaren-Ferrer-Red Bull and the driver championship is still very alive as we had to into the final rates between [ Verstappen ] and Nordisk. Following three events in Austin, Mexico and Brazil, in front of huge crowds. It has been great to see the variety of winners this year, something that is treating fans and raises excitement and the participation for a special season in 2025.
Looking at our engagement across the season. 5.8 millions of 10-gram place through Brazil. Attended is up season to date with sellout crowds on many leases and seven races set new attendance records, including the British Grand Prix, which welcome for 180,000 fans over the weekend, the largest crop for the season. In the third quarter, we had massive crowds over $300,000 at the gain, Belgium Dutch and [indiscernible]. We have also had strong [indiscernible] with attendance up across almost all races and 14 sold out. We have been expanding and innovating our hospitality products like the F1 garage and the Monaco [indiscernible] to continue to provide premium experience to our fans. Our promoter partners are investing in improved infrastructure and enhanced fan experience with live entertainment and on-site activation. Better fund experience benefited the promoters and the broad of F1 brand. In Silverstone Caton with Kings of Lionstone [indiscernible] drew crowds on Thursday and Friday evening. In Singapore, they have the festival styling up with over 100 hours of live entertainment in addition to the on-track action, including concept with [indiscernible] Lanie [indiscernible] . In Austin, over 100,000 fans attended Eminem performance. The Sprint races are also successfully drawing incremental [indiscernible], attests on Friday of Springs weekends are up approximately 30% compared to no sprint weeds. [indiscernible] ship on sprint weekend is also on average, 10% greater than no sprint weekends. This content offers incremental benefit from our promoters, broadcast partners and sparse with increased exposure. Beyond Sprint's average viewership for as we can through Singapore average 65 million [indiscernible] TV channels with around $20 million of incremental views on digital channels, including YouTube and F1 TV. Viewership on digital channels continue to increase year-over-year.
Looking at a few races, in particular, the British Grand Prix was the most viewed the European rate ever in the U.K. and on record viewership in the U.S. for the event. TV subscriber growth continued to be robust, with subscribers up 10% year-over-year and particularly strong in the U.S. market. We continue to innovate on digital platforms with creative ways for fans to experience the world of for. For example, this season, we introduced video episodes for our F1 on the grid podcast and what time is up over 30% since this format was introduced. Social media followers grew 38% year-over-year to $94 million, in part due to the new platform ores like Threads and WhatsApp. Our Water partnership enables a closer direct relationship with fans through the messaging platform. On the F1 app, we registered a 6 million unique users in the third quarter and we are seeing continued growth on the platform contributed to a younger orders and higher engagement. F1 arcade was thrilled to open their Washington, D.C. location of October 13, the second venue in the U.S. their opening party on October 9 and nearly 1,000 guests. The DC location is hosted in a number of brand pre watch party, this season, including 1 last month for the Austin Grand Prix, and it is inviting fast for other F1 inspired gatherings like the live recording of the F1 explained podcast during the Mexico Grand Prix.
F1 Arcade is on track to open its Las Vegas location in the third quarter of 2025. The F1 exhibition reached the first stop of its global tour in London, opening on August 23 with greater reviews from discourse. The location is already seen incredible demand with 135,000 tickets sold. And as a result, the exhibition stays at the location has been extended through the first quarter of 2025.
Turning to commercial updates. We have had incredible momentum in 2024, and that continues this quarter. most notably, our new partnership with MS for 2025 and expanded agreement with American Express and Lenovo demonstrate our ability to bring an iconic brands and scale our partnership into broader and larger deals. LVMH's first partner with Formula One for the last years' inaugural Las Vegas Grand Prix with representation primarily from Ms. Volcan tequila brand. We will now welcome LVMH as a global partner under the groundbreaking 10 years deal beginning in 2025, which will see us partner with their iconic Maison Le Vito, MNC and Tag Heur. We will provide additional details on specific activation by this brand early next year. American Express initially partnered with F1 in 2023 as a regional sponsor with branded activation rights in the Americas. Beginning '25, we will expand our relationship globally with American Express becoming an official partner and compassion Australia, Asia, Europe, the Americas and the Middle East. Similarly, we have announced that beginning in 2025, Lenovo will be expanded to a global partner from their previous official partners sponsorship. We are also actively adding partnership in the new verticals. Santander joined as our official retail banking partner in a multiyear agreement beginning in 2025. This partnership supports Santander's Openbank product, the digital bank that is particularly focused on U.S. market expansion.
For mobile success in the U.S. market was a key factor in securing the Santander partners. One other area of focus gaining momentum is licensing. We were thrilled to announce recent partnership with both Lego and Mattel both of which bring the world of F1 into our fans day-to-day lips and extend our brand to new reduces. The legal product range features all F1 teams engaging content across legal digital platform and passes at F1 race weekend included a fun zone activation. Our Mattel partnership kick off this season. with the release of a one-off kind FAR and the full range of hot wheels product we released next year. Looking to the rest of the season, we are weeks away from the second Las Vegas Grand Prix. The Las Vegas race has continued to serve as a test bed of innovation that we can leverage across the broader F1 calendar, including opportunities in the hospitality, tenure sponsorship and licensing. Just last week, we announced the first of its kind special merchandise collection for Las Vegas ranging from street wear collaboration with the Peters brand to one of a kind Vegas golden nights and [indiscernible]. Since posting this merchandise collaboration on LDGV social channels, we've gathered over 1.2 million organic impressions across the post with more than 93,000 engagement and 86,000 likes. This year's Las Vegas Group pre leverages earnings from last year across the whole event, including hospitality, logistics, ticketing and more. We will continue to test, learn and innovative this year ahead. We are proud of our sustainability strategy and continue to make progress throughout the organization on our environmental, social and governance effort.
In September, we made our first investment in sustainable aviation fuels working with our part of DHL. These purchases cover approximately 11% of the estimated carbon [indiscernible] emission across the 2024 season. and flights powered by sustainable aviation should have an estimated 80% reduction in carbon emission per flight. We look forward to more progress through the end of this year and into 2025.
In closing, Formula One is in a great position with a strong financial growth and incredible on track action. It's looking like the three-way battle for the construction will come down to the final basis. We thank our fans teams and partners for their support in this record season and look forward to more actions to come. Avanti Tota, full speed ahead. And now I will turn the call back over to Greg. Thank you, Ciao.
Thanks, Stefano and Brian. I want to clear up one thing I might have misspoken during our corporate upgrade. On the Braves, they are transitioning to a stand-alone public company. We look forward to seeing you on Thursday, November 14, for our annual investor meeting. You can tune in virtually or join us in person at our new location, Jazz at Lincoln Center. If you plan to end in person, please make sure to [indiscernible] by Monday, November 11, as there will be no on-site registration. The link to register can be found on our website. John Miller and I will be hosting our annual Q&A session. If you would like to submit questions in advance you can e-mail investor day at libertymedia.com. We appreciate your continued interest in Liberty Media. And operator, with that, I'd like to open the line for questions.
[Operator Instructions]. Our first question comes from the line of David Karnovsky with JPMorgan.
First for Greg or [indiscernible] Concord. Any potential updates you can provide there on progress, [indiscernible] or expected timing? And then a second one for Brian. Just on the team payment accrual in the quarter or even year-to-date. The figures do imply a lower full year figure relative to what you had given in Q1 or Q2. So I just want to see if there's anything specific to call out intra-quarter that shifted as far as your assumptions on pre-team profit for the year?
Stefano, I'll let you take a first cut at the Concored.
Thank you, Greg. Thanks, David. I mean, as we said, first of all, it's very important to remember that we have still plenty of time under the existing cohorts, so there is no urgent rush conversations are progressing very well. And as we said before, very, very positive because at this moment, it's -- the ecosystem is very solid. And also all the teams and all the levels of the quarter has had a huge benefit from everyone in this moment. So the financial securement for the future and stability that we have today, it's underlining in the world we are preparing. And as soon as we have everything ready, of course, we will inform everyone. But as always, as I said, we want to do the right thing and consider there's no rush. Everything is progressing well as we said, and looking forward to confirm to you when we're going to announce something concrete.
So I would just add that to Stefano's point, the most important thing for everybody, including ourselves and the team, is to get it right. And so we're progressing at a good pace with the expectation that everyone will sign with glee on their face.
Yes. And David, on the team payments, as you rightly point out, they've come down just a little bit on a per raise basis. I think that represents some conservatism towards Vegas because really, that's the last remaining uncontracted revenue stream that we have for the year. And it largely reflects typical year two trends that promoters see. So that would be the primary reason.
Our next question comes from the line of [ Kutgun Maral ] with Evercore ISI.
Just on Formula One sponsorship, Clearly, there's a lot of momentum there. You've announced a number of new and expanded agreements. It seems like 2025 is going to be a banner year. And Greg, I think you commented that you feel good about the pipeline for commercial activity in 2026 as well. Can you help us just think about how meaningful the sponsorship revenue growth outlook can be in the coming years?
I'll take a first cut, if it's okay. Stefano.
Look, you've seen the announcement here that are mostly '25 related. It's unusual, one would not expect to be making announcements yet about '26 related deals. But we have a lot of activity going on around potential sponsorship around licensing and other activities. So it's very hard. You're still quite a ways out from those, but I feel good about the progress. I don't know if you'd add anything, Stefano
No, I would say for sure. And as always, you need to remember, we were just a couple of years ago in terms of and also for our partnership. Now we are growing significantly in terms of quantity. And of course, now the time is really to check in terms of restructuring the deals in terms of global, regional, official partners due to the fact that we have a strong interest in our market so far. So there are for sure others that we will exploit in the future. But the only thing that I can confirm, as was mentioned, is really we are really bringing in the interest that we are having from pulp that are high, high value in the market. And that would be another leverage because to business growth within the relation working grade with other partners, we can create even more interest in our platform. So as I said, look back and see where we were and look where we are, and I think that the future is always -- it will be very positive again.
Yes. And one thing I would add almost more towards David's question, that the sponsorship that we've announced for 2025, you've also seen that's all moving into '25. So any expectations that we had for those new agreements for '24 also had that impact on team payments .
Our next question comes from the line of Stephen Laszczyk with Goldman Sachs.
Two on Formula One. Maybe first for Greg, on media rights. Just curious your latest thoughts on the sports media rights landscape heading into the U.S. renewal next year and maybe how you're approaching your negotiations with ESPN. And then second, on Vegas, Brian, you mentioned the Las Vegas Grand Prix being the last uncontracted piece of the puzzle here. Just curious if there's anything more you can say on demand for Vegas heading into the final weeks and any expectations around revenue and profitability for the event this year.
Stephen, thanks for the question. I'll start on the media side. As I think is well known, we have a partnership with ESPN that runs to the end of '25. It would be not atypical that there is some negotiated period with them. I'm obviously not going to disclose the specifics. ESPN has been a great partner. We will look to see what we can do with them, but there's also a lot of other interest from -- but partners, and we'll try and construct the deal that manages to bring both the best economic opportunity for F1, but even more importantly, perhaps, expose our fans the best experience in a logical way across as much breadth as possible. So -- as always, we're going to play between economics and reach and hopefully come up with the best result for our F1 fans and ourselves. I'll let Renee talk a little bit about Las Vegas.
Thanks, Greg. So maybe we need to take a step back, focus on what we've been working on here in year 2. Obviously, year 1, we are very much focused on the quality of the fan experience Year 2 has been a lot of focus around cost structure and optimizing our product ladder. We do expect that to continue going into years 3 and beyond. We made a number of improvements coming into this year, which have allowed us to continue to be dynamic in adjusting products and pricing based on real-time feedback we're receiving from the market. We would note the all-in cost of a Vegas race weekend has come into line with the other U.S. races. And we would refer you to the commentary from our hotel partners win and Caesars regarding continued strength of F1. .
In terms of recent activity, as expected, we are seeing an uptick in traffic and conversion rates around tickets sold, and we expect that to continue as we get closer to the race weekend. We are, of course, benefiting from the very competitive championship this year, and we have seen success with our recent promotions, including the Lewis Hamilton package and some special offerings that we've run in partnership with our sponsors, T-Mo and MX. We still have room to grow on ticket sales, but we are very excited to see year 2 come together over the next couple of weeks. And of course, we remain very positive on the benefits that Vegas is providing to the broader ecosystem of Formula One, including the LVMH deal, American Express and getting back to the media rights renewal, we're looking to see the benefit of Vegas next year as well when Greg puts those discussions.
Our next question comes from the line of Vince Swinburnewith Morgan Stanley.
Thanks not sure, Greg, how much we want to comment, but Live Nation stock has been quite strong last few months. Some of that, I think, in anticipation correctly, I guess, of the election outcome, what do you think a Republican DOJ means for the range of outcomes for the lawsuit against Live Nation and its ability to navigate that successfully from a shareholder point of view. And then at the risk of beating team payments to [indiscernible] Brian, I think your -- you've shown over 200 basis points of leverage year-to-date, how you think about the full year versus that? And how much of a swing factor is Las Vegas? Is that sort of a larger than normal variable when you think about your business as we think about the full year?
Ben, it was nice of you to set up and acknowledge it would be very difficult for me to comment on. I think Look, Live Nation continues to prosper as a business and continue to believe it serves customers well. and there is notes for the lawsuit, and I don't think that's going to change -- their view is not going to change regardless of administration.
Yes, on team payments, like we said last quarter, Ben, slight leverage, I think de minimis might have been the words I used when we were at 61.9% year-to-date Q2. So we're going to stick with that. In terms of Vegas being a swing factor, I mean if you think about our business, most of the revenues are contracted, most of the costs are contracted. The two big swing factors in any given year are the sponsorship go get and then Vegas ticket sales because that -- those have the highest volatility. So yes, as you get closer to the end of the year, you start to get more clarity on both of those, although Vegas being a last-minute market, as we've pointed out many times, there's lots of work to be done as you enter Q4. So it can be a swing factor, but we continue to be optimistic here.
Thank you. Our next question comes from the line of Ryan Portet with UBS.
Great not to look too far ahead, but I guess, how are you thinking about the opportunity for race promotion and the race calendar in 2026? Is that a year when we could start to see some new venues added to the calendar? And just more broadly, how you're thinking about your positioning for renewals, given the elevated attendance you've seen over the past few years?
Stefano, do you want to take a cut?
Okay. Thanks, Greg. Of course, '26 race promotion. As you know, we have Madrid that will be part of the calendar. We have long-term deals on the other side, as you know, that is representing the vast majority of our situation today. And this allow us, of course, to work with them in order to promote better quality to make sure that what we want to offer to our customers to level is the highest standard. In '26 and further beyond, of course, we have some news to share very very soon with regard to the possibility in the midterm to have some rotational European Grand Prix and some other new option coming later. And this is something that, of course, we will clarify in the due course. It is true that we have a large demand of even new possible venues that want to come in. And our choice will be always balanced between the right economic benefits that we can have as a system and also to leveraging the growth of the market that we can see potential will be beneficial for us to grow even further our business. So it's something that we are managing in the right way. And this got today, we have a quality problem to handle. That was not the case just a couple of years ago.
Our next question comes from the line of Bryan Kraft with Deutsche Bank.
And two, if I could. First, on media rights. Are there other major markets in the Americas that have media rights contracts coming up for renewal around the same time as the U.S. And might we consequently see in Americas media rights deal rather than just a U.S. contract this time around. And then also related to that, how has what you value from your U.S. media partner changed since the renewal of ESPN, given just how streaming has become such a larger part of the business now? And then just separately, sort of a follow-up on Vegas, maybe ask a little more bluntly, I mean it sounds like promotion revenue is clearly going to be up, but ticket prices are going to be down. So probably overall ticket revenue is going to be down. Is that a fair interpretation of what Renee was going through before?
Okay, Stefano. I'll take a cut on the media.
Look, we would love to find a partner who would take on more markets. That's always very interesting and make the ease of perhaps with them and us. there are no huge renewals in the Americas that make it logical, not to say it wouldn't happen, but I don't think it would be an enormous economic swing in any case if we bundled with somebody for all the Americas. We certainly have had rumors of larger deals. And in some cases, we certainly do have regional deals, but I'm not sure that's going to work for the Americas that way, that there's some partner who is going to take all of it that way. As far as streaming, obviously, we see the rise of streaming. We've noticed a couple of costs across a couple of our businesses, we certainly noticed. The reality is we have a great stream product in F1 TV ourselves, which has shown tremendous growth. And we would look to consider whether a media partner, how we interacted with them on both a linear side of the existent and the streaming side and how our F1 TV fit in. But clearly, streaming is going to be a more major component of all sports rights packages going forward.
And on Vegas or sorry, again.
Sure. Yes, happy to. So I guess just to reiterate, we generally do not give a specific economics. But with regard to your question on ticket revenue, aggregate ticket revenue will be down from what we originally budgeted in Q1. However, throughout the course of '24, we have also continued to reduce cost from what we budgeted in Q1. So I would say that we're working hard to focus on getting the best profitability that we can from Vegas. And again, we would refer you to the broader benefit that it does bring to the F1 ecosystem.
Our next question comes from the line of David Joyce with Seaport Research Partners. .
I had two questions, please. One was just a little bit more on the media rights. Just given that some of your recent deals have been extended beyond the typical kind of 3-year period we used to see and other sports leagues have done that as well. Just wondering how you're thinking about your objectives with these upcoming rights deals. And then the second question is on just a little one on the accounting of how you'll be recognizing the F1 movie next year.
So I think on the media rights deals, I outlined some of our goals in terms of growing reach and making it a great experience for our fans as well as payments to us. So I think all of those goals remain the same. We've chosen market-by-market longer or shorter deals based on where we stood in the market, what our growth was, what our partners were doing what we wanted to go. And obviously, one of the reasons we cut a shorter deal in the U.S. last time is we were confident in really betting on ourselves that we would get a larger renewal down the road. That work the first time we did a 3-year deal. I'm optimistic it will work again. I'm not projecting whether the deal will be shorter or lower. I would note it's likely, particularly if you went to another partner, which not sure that's going to happen. You probably would cut a longer deal just because that partner would want to have some period to grow and do it and work together. But that's just observing on the media market. That's not projecting what we will or will not do in the U.S.
And on the F1 movie, we've been paid in 2023 and 2024 for their use of the [indiscernible] building and having access to certain races. I think going forward, the revenues that you would expect there would be pretty small.
Our next question comes from the line of Barton Crockett with Rosenblat Securities.
Okay. Great. I guess a couple, if I can. One is turning to Vegas, looking beyond the race. I know there's been some hope that the off-season could be monetized at Vegas and that could help maybe the margin profile. And I was just wondering if you could give us an update of your progress there are you really doing anything meaningful in the off-season, you mentioned the film. I'm just wondering anything else meaningful happening. .
Sure. So we are working hard to launch the euro business beyond just the Event Conference segment beginning in, I'd say, late Q1 of '25, it's going to be actually very much focused around educating new fans bringing the new fans deeper to the sport. Obviously, Las Vegas is a destination, and we want to try to leverage that and bring these visitors to learn more about Formula One coming deeper into the U.S. culture. There will be a carding business there. There will also be a fun interactive experience or 3D, 4D type offering, which will also include a little bit of the legacy F1 acquisition type educational experience as well. And then we will be looking to package those experiences to enhance net conference space. So a lot more to come, and we hope to be giving more specifics around that business during race-week.
Okay. And then if I could just follow up also on sponsorship. Just to be clear, with all these announcements starting in 2025, it sounds like 2025 is going to be a strong year for sponsorship. But I was just wondering if you could comment on that more directly. Is that what we're seeing?
Yes. It is going to be a good year, Barton. -- you called it correctly.
Ladies and gentlemen, our final question this morning comes from the line of Jonathan Navra with TD Cowen. .
Just my question is around the new market expansion. Are there any plans to expand the rate calendar, especially in emerging markets? Or -- and what I'm trying to get at is I'm trying to get a sense for what your approach to balancing market expansion while maintaining the exclusivity of the lore of Formula One?
Stefano, do you want to talk about expanding race count I think I know the answer, but I'll let you go off on it.
Thanks, Greg. I would say -- as we said, we believe that the balance we have in terms of number is the right one. So '24 is the balanced number that we feel it's the right to keep exactly what you say Jonathan and I do believe that all the propositions that are coming on our table is just giving us the possibility to make even the better choice for our future. So as always need to be balanced. Knowing that we cannot follow only the pure direct financial proposition because that is different from region to region. But it's up to us to propose to our stakeholders the right choice. And I think that we are in a good momentum to make sure that the strategy for the future it's even stronger. And that's why we are so confident about the fact that this will help to enhance our platform on the sport on social and business perspective.
So I think that, operator, we're done on questions, and we're done with the conference today. As I mentioned, we look forward to seeing many of you either virtually or in person next week at our Investor Day. Thanks for joining and your interest in Liberty Media.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.