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Liberty Media Corp (FWONK)·Q3 2024 Earnings Summary

Executive Summary

  • Formula One Group delivered resilient results despite one fewer race: Formula 1 revenue fell 3% year over year to $861M, but operating income rose 11% to $146M and Adjusted OIBDA grew 3% to $221M on lower team payments and solid sponsorship/licensing momentum . Total Formula One Group revenue (incl. Corporate & Other) was $911M .
  • Commercial pipeline accelerated: new and expanded partners (LVMH Global Partner, Lenovo elevated to Global Partner beginning 2025, American Express, Santander) and multi‑year licensing deals with LEGO and Mattel Hot Wheels to expand fan monetization in 2025 .
  • Balance sheet strengthened: F1 refinanced debt, reducing Term Loan B margin to 2.00% (potential step‑down to 1.75%) and extending maturities (TLA/RCF to 2029; TLB to 2031). Liberty also secured all MotoGP funding, including a $949M FWONK equity raise and incremental $1.0B term loans, positioning close by year‑end 2024 .
  • Engagement and attendance remained robust: sellout crowds at nearly all races; season‑to‑date race attendance at 5.8M as the championship tightened, supporting longer‑term media and direct‑to‑consumer tailwinds .
  • Consensus estimates from S&P Global were unavailable at time of analysis due to access limits; estimate comparisons could not be validated. Values retrieved from S&P Global were unavailable (S&P Global data access limit exceeded).

What Went Well and What Went Wrong

What Went Well

  • Operating leverage with fewer races: Despite seven races in Q3 vs eight last year, F1 operating income rose 11% to $146M and Adjusted OIBDA increased 3% to $221M, aided by lower pro‑rata team payments and higher licensing revenue .
  • Commercial traction and new monetization lanes: “We signed a ground‑breaking partnership with LVMH for 2025... expanded our relationships with Lenovo and American Express, and secured licensing agreements with LEGO and Mattel’s Hot Wheels” (Stefano Domenicali) .
  • Balance sheet actions de‑risk MotoGP and lower interest costs: “We refinanced the F1 debt facilities and secured all necessary funding for our planned acquisition of MotoGP” (Greg Maffei); Term Loan B margin cut to 2.00% with potential step‑down to 1.75% and maturities extended .

What Went Wrong

  • Primary F1 revenue declined YoY: Primary revenue fell 4% (to $758M) on one fewer race and race‑mix effects that reduced media and sponsorship recognition; hospitality was lower due to event mix .
  • Cost pressures in servicing revenue: Other cost of F1 revenue increased on higher commissions/partner servicing and digital costs; SG&A rose on personnel, IT, property, marketing, and legal/professional fees .
  • Incremental program and lease costs: Higher costs from F1 Academy and lease expense for the Las Vegas Grand Prix Plaza affected the quarter; Corporate & Other performance is seasonal (F1 Experiences) .

Financial Results

Consolidated/Attributed Results and F1 Operating Metrics (oldest → newest)

MetricQ1 2024Q2 2024Q3 2024
Formula 1 Revenue ($M)$553 $871 $861
Corporate & Other Revenue ($M)$44 $141 $70
Intergroup Elimination ($M)$(10) $(24) $(20)
Total Formula One Group Revenue ($M)$587 $988 $911
F1 Operating Income ($M)$136 $84 $146
F1 Adjusted OIBDA ($M)$208 $160 $221
Races in Period (#)3 8 7

Q3 2024 F1 Revenue Detail and Costs

MetricQ3 2023Q3 2024YoY
Primary F1 Revenue ($M)$790 $758 (4%)
Other F1 Revenue ($M)$97 $103 +6%
Team Payments ($M)$(432) $(371) +14% (lower outflow due to fewer races)
Other Cost of F1 Revenue ($M)$(183) $(190) (4%)
SG&A ($M)$(57) $(79) (39%)
Depreciation & Amortization ($M)$(82) $(74) +10%
F1 Adjusted OIBDA ($M)$215 $221 +3%
F1 Operating Income ($M)$132 $146 +11%
Races in Period (#)8 7 —

KPIs and Other Operating Items

KPI / ItemQ3 2024
Season‑to‑date race attendance5.8 million; sellout crowds at nearly all races
Sponsorship/partners announcedLVMH (Global Partner, from 2025); Lenovo elevated to Global Partner from 2025; American Express, Santander as Official Partners
LicensingMulti‑year deals with LEGO and Mattel Hot Wheels; 2025 product launches expand F1 beyond race calendar
Corporate & Other commentaryQuint results primarily driven by F1 Experiences across seven races in Q3 (seasonal)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidance (revenue, margins, OpEx, tax)FY/Q4 2024None disclosedNone disclosedn/a (no formal guidance provided)
MotoGP acquisition timingClose by year‑end 2024On trackOn track; all debt funding secured; raised $949M FWONK equity in AugMaintained/De‑risked
F1 debt facilitiesn/aPrior margins/maturitiesTLB margin to 2.00% (possible step‑down to 1.75%); TLA/RCF to 2029; TLB to 2031Improved terms/extended maturities

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2024)Current Period (Q3 2024)Trend
Sponsorship momentumGrowth across sponsors; recognition benefited from additional races (Q1/Q2) New/expanded partners (LVMH, Lenovo Global Partner from 2025; AmEx, Santander) Uptrend
Licensing and fan productsNotable but less emphasizedMulti‑year LEGO and Mattel Hot Wheels deals; 2025 scaling Uptrend
Race calendar/mix24 events scheduled; quarterly comps influenced by race count/mix (Q1/Q2) 7 vs 8 races drove lower season‑based revenue recognition; race‑mix impacted sponsorship/hospitality Neutral (seasonality)
Direct‑to‑consumerContinued growth in F1 TV subscriptions (Q1/Q2) Media rights benefited from F1 TV growth; strong digital engagement as championship tightened Uptrend
Capital structureQ2: solid cash build, corporate actions; (re)financing discussions F1 refinancing and secured MotoGP funding reduce risk, lower borrowing costs Improved

Management Commentary

  • Greg Maffei, President & CEO: “We closed the Liberty SiriusXM merger with SiriusXM, refinanced the F1 debt facilities and secured all necessary funding for our planned acquisition of MotoGP. Formula 1’s commercial progress is incredible and we were thrilled to announce a number of hallmark deals beginning in 2025, including our new multi‑year partnership with LVMH.”
  • Stefano Domenicali, President & CEO, Formula 1: “We signed a ground‑breaking partnership with LVMH for 2025... expanded our relationships with Lenovo and American Express, and secured licensing agreements with LEGO and Mattel’s Hot Wheels... The thrilling racing and tight championship has benefitted viewership and digital engagement... Race attendance is up season‑to‑date at 5.8 million with sellout crowds at nearly all races.”

Q&A Highlights

  • Themes on the call included MotoGP acquisition timing/funding, commercial partnerships pipeline, and revenue recognition dynamics from race calendar mix; management reiterated the MotoGP close is on track by year‑end 2024 and highlighted 2025 partner activations (e.g., LVMH) as incremental growth drivers .
  • Management emphasized that one fewer race lowered the proportion of season‑based media and sponsorship revenue recognized in Q3, but underlying demand, digital engagement, and DTC traction remain strong into 2025 .

Estimates Context

  • S&P Global consensus estimates (EPS, revenue, EBITDA) for Q3 2024 were unavailable due to data access limits at the time of analysis; as a result, we cannot validate beat/miss vs S&P Global consensus. Values retrieved from S&P Global were unavailable.
  • Actuals: Formula One Group revenue $911M (incl. Corporate & Other and intergroup elimination) and F1 segment revenue $861M; F1 Adjusted OIBDA $221M; F1 operating income $146M .
  • Implication: Estimate models may adjust for 2024 race‑mix timing (fewer Q3 events) and incorporate 2025 commercial partner ramps and licensing contributions.

Key Takeaways for Investors

  • Commercial durability: New/expanded partners (LVMH, Lenovo, AmEx, Santander) and licensing (LEGO, Hot Wheels) support 2025 revenue visibility beyond the race calendar; watch for incremental activations at season start .
  • Seasonality matters: YoY softness in Primary F1 revenue reflects one fewer race and event mix; underlying operating metrics improved (OI +11%, OIBDA +3%) with cost discipline and lower team payments .
  • Balance sheet/cost of capital tailwinds: F1’s debt refinancing lowers Term Loan B margin and extends maturities; potential further step‑down post‑MotoGP close reduces interest drag .
  • Engagement underpinning media/DTC: Strong attendance and digital engagement alongside F1 TV subscription growth remain key drivers of media rights and direct‑to‑consumer monetization .
  • 2025 setup: Expect benefit from full‑year partner ramps, licensing product rollouts, and 24‑race calendar normalization; monitor Las Vegas property ecosystem’s steady‑state economics via Corporate & Other .
  • MotoGP close is a catalyst: Funding secured and close targeted by year‑end 2024; integration/portfolio narrative and potential synergies to be watched through 2025 .
  • Estimates unavailable: With S&P Global consensus not accessible here, anchor on reported Q3 actuals and known 2025 commercial drivers pending formal guidance.