Stephen Laszczyk

Stephen Laszczyk inquired about F1's margin outlook, specifically seeking confirmation on the projected 200 basis points of team payment operating leverage for 2026 and identifying potential upside or downside factors. He also asked about long-term margin expansion opportunities beyond team payments over the next three to five years.

Answer

CAO and Principal Financial Officer Brian Wendling confirmed the approximate 200 basis points leverage for team payments in 2026, noting potential variability. He added that primary revenue stream growth should offer leverage, balanced with continued investment and costs associated with partner servicing and Paddock Club obligations. MotoGP CEO Carmelo Ezpeleta emphasized that costs are tied to marginality growth and long-term promoter deals enable further investment for enhanced experiences.

Stephen Laszczyk asked about the trending of "The Wizard of Oz" ticket sales during the seasonally weaker winter period in Las Vegas and any demand insights influencing show count and pricing strategies for the upcoming spring and summer. He also questioned the SG&A expenses in the fourth quarter, adjusting for management transition costs, and provided an outlook for the expense line item in 2026.

Answer

Jennifer Koester, President of Sphere Business Operations, noted "The Wizard of Oz" demonstrated resilience and strong growth despite Las Vegas headwinds, with confidence for the next year. She detailed aggressive scheduling of multiple shows to enhance revenue per day, guided by demand forecasting and an anticipated strong convention season. Executive Chairman and CEO Jim Dolan added that "Wizard of Oz 2.0" is expected to further boost the product's longevity. EVP, CFO, and Treasurer Robert Langer stated that SG&A expenses in Q4 included executive transition costs and share-based awards, but adjusted for these, they were consistent with prior 2025 levels. He affirmed a continued focus on cost efficiency for 2026 while supporting global growth.

Stephen Laszczyk inquired about the trending of 'The Wizard of Oz' ticket sales during the seasonally weaker winter period in Las Vegas and how demand is influencing decisions on show count and pricing for spring and summer. He also asked about the drivers behind the higher SG&A expenses in the fourth quarter, even after adjusting for management transition costs, and the outlook for this expense line item in 2026.

Answer

Jennifer Koester, President of Sphere Business Operations, noted resilience and strong growth for 'The Wizard of Oz' despite Las Vegas headwinds, with aggressive scheduling of multiple shows to maximize revenue per day based on demand forecasting and an anticipated strong convention season. James Dolan, Executive Chairman and CEO, added that 'The Wizard of Oz 2.0' and new products are expected to further boost demand. Robert Langer, EVP, CFO, and Treasurer, explained that Q4 SG&A included executive transition costs and mark-to-market adjustments for share-based awards, with adjusted SG&A levels similar to other 2025 quarters. He affirmed a continued focus on cost efficiency for 2026 and beyond, balancing it with infrastructure for global growth.

Stephen Laszczyk from Citi asked about the potential for a minority interest sale and the anticipated impact of upcoming changes to the tax deductibility of compensation.

Answer

Jamaal Lesane, Chief Operating Officer, stated there was no news regarding a minority interest sale but affirmed confidence in the teams' value, noting recent market transactions confirm these are scarce, valuable assets. He did not rule out a future minority stake sale. Victoria Mink, EVP, Chief Financial Officer, and Treasurer, added that the company is assessing the impact of tax regulation changes, effective for the fiscal year ended June 30, 2028, but had nothing further to share at this time.

Stephen Laszczyk asked about the potential for a minority interest sale and the anticipated impact of upcoming changes to the tax deductibility of compensation, effective in 2027.

Answer

Jamaal Lesane, COO, stated there was no news regarding a minority interest sale but affirmed confidence in the teams' value, noting recent market transactions confirm these are scarce, valuable assets, and the company would never rule out a minority stake sale. Victoria Mink, EVP, CFO, and Treasurer, added that the company is assessing the impact of tax regulation changes, effective for the company in the fiscal year ending June 30, 2028, but had nothing further to share.