Liberty Media (FWONA) Q4 2020 Earnings Call Transcript

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Liberty Media (FWONA)
Q4 2020 Earnings Call
Feb 26, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2020 Year-End Earnings Call. [Operator Instructions] Afterwards we will conduct a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead.

Courtnee Chun -- Chief Portfolio Officer

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 Liberty Media's most recent Form 10-K or Liberty Media Acquisition form S-1, the registration statement filed with the SEC.

These forward-looking statements speak only of the date of this call, and Liberty Media and Liberty Media Acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Media or Liberty Media Acquisition Corporation'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 and SiriusXM, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media and SiriusXM's Schedules 1 & 2 can be found at the end of the earnings press release issued today, which is available on the Liberty Media website.Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Gregory-B-Maffei -- President and Chief Executive Officer

Thank you. Courtnee, and good morning to all of you. Today speaking on the call, we will also have Formula One's new President and CEO, Stefano Domenicali and Liberty's Chief Accounting Officer & Principal Financial Officer, Brian Wendling. I would once again like to recognize and thank our management team and employees for the tremendous job they have done managing through COVID and difficult circumstances.

Beginning with Liberty SiriusXM, I'd note we continued our share repurchases -- repurchasing $99 million across both LSXMA/K shares in the November to January time frame. As you know, the discount persists and we repurchased at a look-through price on SIRI of about $3.70 per share. We do expect to continue to take advantage of the discount opportunity, in part driven by some recent balance sheet improvements we have at LSXMK. In November, we raised $929 million of a live exchangeable bond at 50 bps to repay our live exchangeable maturing later this year and fund the call spread between LSXM and FWONA [Phonetic] originated when we did the reattribution.

In tandem, we amended the live margin loan and unencumbered a substantial portion of our live equity. Also, after quarter end, we amended our SIRI margin loan, increasing our borrowing capacity from $1.35 billion to $1.75 billion. Accordingly, we have generated substantial incremental borrowing capacity to go after that discount, and we continue to take advantage of it. Our ownership of SiriusXM, as of January 29th stood at 76.4%. We do expect to get 80% ownership in this year, and we recently announced a tax sharing agreement between SiriusXM and Liberty SiriusXM.

The SIRI Board of Directors evaluates capital return strategy every quarter and will continue to do so if Liberty gets to the 80% ownership level as we expect later this year. So looking at Sirius itself, we welcome to Jennifer West, who assumed her new CEO role in January. The new car penetration at SIRI hit 80% in the fourth quarter, and we have line of sight to get it 82% in 2021. SiriusXM hardware is now in one out of every two cars on the road, and the number continues to climb. [Indecipherable] and self-pay households listening in the digital environment, i.e. out of the car, grew 40% in 2020, and Stitzer has the largest share of US podcast listening audience available to advertisers. Please do make sure you listen to the podcast of the year of Office Ladies. If you have been to our Investor Days, you know how much we love the Office.

Turning to Live Nation, we continue to have great demand for concerts, perhaps notably, The Weekend sold over 1 million tickets worldwide for his 2022 tour just one week after announcing the tour. Clearly, there is robust demand as we noted for live music. Live also acquired a majority stake in Beeps, a ticketed livestream platform. I encourage you to check out the series they have on Rufus Wainwright.

Turning to the Formula One Group, as I mentioned, we have a new CEO there, Stephano Domenicali from whom you'll hear in a minute. We are planning for a record 23 races this year. Notably the Orange Army is ready to welcome the Dutch GP and local hero, Max Verstappen, in September at Zandvoort. 2020 show, we have ample demand for hosting races, even on short notice from both new and historic tracks.

And now for many of you, who have seen everything you want to see streamed online this year, get ready to tune in for Season 3 of Drive to Survive, which drops on Netflix on March 19th. In January, we introduced LMAC with SPAC. We raised $575 million, that's the largest corporate SPAC to-date. According to bankers who are involved and maybe they're biased. It was the most oversubscribed SPAC of all time, and the first trade at $1,320 was the highest initial trade for any SPAC to-date. Stock has continued to trade well, but admittedly on pinned volume. We are actively in discussions with a number of targets in the TMT space. The 20% interest in LMAC is attributed to the Formula One Group. And I would remind you that the Formula One Group has committed to forward purchase $250 million and $10 per unit in connection with the initial business combination when it occurs.

Turning to Braves, we sadly lost some icons at the Braves in this off season, and we'd like to start by paying tribute to them. Notably, Phil Niekro and of course Hank Aaron. We started a fund named after Hank Aaron with $1 million from the Braves plus $1 million from Major League Baseball and the Major League Baseball Players' Association to help grow diversity in baseball. We are excited about our enhanced 2021 roster coming off a winning the NL East for our third straight season. We did resign Marcell Ozuna to a four-year deal. As you may recall, we came within one year -- one win rather from going to last year's world series. So our guys are ready to go. Freddie Freeman coming off of his 2020 NL MVP, Acuna, Albies and more are hungry and ready. Spring Training did start recently on Tuesday and our first Spring Training game is this Sunday. We expect fans to be attending the 25% capacity.

Turning back to the home front at Three Ballpark office tower, we are near completion and 70% leased, both TicknCook and Papa John's will fully occupy their space by the summer of 2021. 97% of the Battery's tenants are operational, which speaks to the relative [Indecipherable] Georgia, and we believe bodes well for fans at Truist this year. We do expect to have fans in the sands, but are not yet sure of the seating capacity restrictions. And we do have significant demand for both tickets at Truist and Spring Training. As I noted, we look forward to a great 2021 season and including hosting the MLB All-Star game on July 13th.

So with that, let me turn over to Brian for some more financial results.

Brian J. Wendling -- Chief Accounting Officer and Principal Financial Officer

Thanks, Greg, and good morning, everyone. At Liberty SiriusXM Group, we've taken a number of steps to boost liquidity and strengthen the balance sheet. In the fourth quarter, we issued $920 million of Live Nation exchangeable bonds and amended our Live Nation margin loan, unencumbering substantial Live Nation equity value as part of the amendment, decreasing the shares underlying the loans and $53.7 million to $9 million.

Subsequent to quarter end, we amended our SIRI margin loan, increasing borrowing capacity to $1.75 billion, up from $1.35 billion at year end and borrowing an additional $125 million. Inclusive of this additional margin loan draw, Liberty SiriusXM Group had attributed cash, restricted cash and liquid investments of $1.1 billion, excluding $83 million of cash and restricted cash held directly at SiriusXM. We also had $1.1 billion of undrawn margin loan capacity at the parent level.

Approximately $860 million of our cash will be used in 2021 to settle the call spread between the Formula One Group and the Liberty SiriusXM Group and to repay our 2.25% Live Nation exchangeable bonds, this value is based on estimates of the fair value of both liabilities at year-end. As of February 25th, the value of the SiriusXM stock held at Liberty SiriusXM Group was $19 billion and the value of our Live Nation stock was $6 billion, excluding the value of the Live Nation call spread held at Formula One valued at $371 million at year end.

We've $3.2 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt was $12.8 billion, which includes $8.6 billion of debt at SiriusXM directly. Formula One Group had attributed cash and liquid investments of $1.4 billion, which excludes $265 million of cash held at Formula One and total Formula One Group attributed principal amount of debt was $3.6 billion, which includes $2.9 billion of debt at F1, with $727 million the corporate level.

At year-end Formula One $500 million revolver remains undrawn. At quarter end, Braves Group had attributed cash and liquid investments and restricted cash at $185 million and attributed principal amount of debt of $674 million. They are currently in compliance on all debt covenants across the portfolio.

With that, I'll turn it over to Stefano to discuss Formula One.

Stefano Domenicali -- President and Chief Executive Officer

Thank you, Brian. I am thrilled first of all and honored to lead Formula One. Thank you to Liberty, the FIA, the teams and all of our partners for the warm welcome. Before I start, I want to thank Chase for his tireless work over the past four years in building our organization that gives us the very strong foundation for the growth in the decades ahead. Last year was a challenge for everyone around the globe, and every business on the sport felt the impact of pandemic.

Formula 1 delivered what many thought was impossible. A 17 races calendar delivered safely and with huge enthusiasm from our fans. 72% think that F1 has improved over the past two years. 68% believe F1 is in good hands under Liberty Media. 71% rate their satisfaction with being an F1 fan, as eight or higher. Furthermore, fans believe Formula 1 handbook is safely very, very well during the global pandemic, with 90% believing the swift measure put in place to allow races to go ahead have been handled well. 81% believe in F1 has communicated well with fans during the shutdown and 73% believe in F1 has handbook the absence of fans of the race as well and 88% think positive about the calendar in 2020.

We all continue to navigate the challenge of COVID-19 this year. However, that will not preclude us [Indecipherable] and opportunities we see in front of us, which are: number one, put in the drivers at the center of F1, as they represent the soul and are the ambassador of the sport. The level of talent we have today on the grade is one of the highest in F1 history, and we should celebrate that. Number two, delivering an incredible product that strengthen its competition and action on the track, included 23 races this year. Number three, enhancing the long-term prospect of sport and ensuring it's an attractive business model for all participants and attracting new participants. And number four, remaining committed through our action to our We Race As One platform, focus on sustainability, diversity and inclusion and community.

To reflect on 2020, we were extremely proud to complete a successful 17 race season. The last few races brought some new faces to podium, including the Sakhir GP, which saw Sergio Perez claiming his first win alongside Esteban Ocon and Lance Stroll in the same time -- in the same race, we were relieved to see Roman Grosjean walk away from a fiery crash, a testament to Roman, his support teams on the track and improved safety measure in the sport.

Max Verstappen secured the win of our last Grand Prix in Abu Dhabi, which capped a very successful season for Red Bull, who placed second in the constructor standing. On the financial fronts clearly, we were impacted by COVID-19, but working in collaboration with our partners to mitigate these impacts. Due to the reduced number of races, duration of the season, and almost no fan attendance, unsurprisingly primary revenue declined in all categories. However, we worked with our promoters to extend contracts where mutually agreed and worked with certain sponsor to defer selective rights into future years. We approached these agreement with the spirit of partnership and largely isolated the old contract to impact 2020.

The spirit of collaboration, together with the ongoing terms of our account, leave us well positioned with all of our material commercial partners as we enter in 2021. For the full season, we are pleased with the reaction from our fans across multiple platforms. We made significant gains across social platforms, making us the second fastest-growing major support league in term of follower across the four major social platform ahead of major sport, such as NFL, NBA, PGA Tour and WWE.

We have seen the fastest growth in the digital engagement, compared to all our major sport with a 99% decrease in 2020. On TV, our average orders for Grand Prix was $87.4 million, very marginally down on 2019, but still higher than the average order in 2019, are compared favorably to other major sports with an international footprint that's experienced deep decline in 2020 due to the pandemic. We plan to engage more fans in 2021, and we have set for an exciting 23 races calendar. This includes the addition of Saudi Arabia and much anticipated race in the Netherlands.

We will navigate the challenge of pandemic, but are pleased with how we have already been working with our partners. We were able to reschedule Australia later in the year and announced the return of Imola and Portimao to the schedule. All conversations with promoters have been positive since the start of the year. And every one of them has made it clear that the events should be going ahead as scheduled.

We'd love to welcome fans back on the track and we'll be working with the local organizing and governments on that approach. We are also grateful for the efforts made by the government to allow Formula 1 to continue to travel to our events during a time of global quarantine. Our highly robust safety procedure have proven we can travel and race safely.

Furthermore, we have evaluated the race weekend with a proposal to try a new Saturday's sprint races format of some races in 2021, the result of which would that reminds the group for the main events on Sunday. This was supported by the teams in principle at the meeting a few weeks ago, and we will work with them and the FIA to finalize the details before the start of the season. On the sporting side, we are expecting an exciting season with Lewis Hamilton and Mercedes fighting for the unique and historic 8th World Championship.

We hope to see Ferrari, with that all the history in the sport been they have fight back and are excited for all the new pieces and lines up on the grid. For most of the season, we were wondering where Sergio Perez would find a driver's seat, and we can't wait to see him pair up with Max Verstappen.

McLaren, who had spectacular 2020 season finished third in constructor standing. We'll see Daniel Ricciardo and Lando Norris up together. We welcome Aston Martin, an iconic brand with a seasonally champion Sebastian Vettel behind the wheel. We also welcome the return of Fernando Alonso to remain Alpine team, he is doing well, by the way, following his recent accident and looking forward to seeing him at the start of the season in Bahrain. And of course, the world will be watching the major season of Mick Schumacher at Haas.

Last year was momentous for Formula One signing the new Concorde Agreement and reaching agreement on the introduction of a cost cap taking effect this year in 2021. The next major area to cover relates to the power unit to our engine. In a demonstration of a collaboration, the FIA, Formula One and the teams have voted to freeze power unit development from the start of 2022. A high level of working group has been established, we think whose power unit manufacturer and food supplier.

As we look to the next generation of the power units for 2025, the key objective are: carbon neutrality, truly sustainable fuels, hybrid power unit, significant cost reduction and of course, attractiveness to the new power unit manufacturers. We believe that the sustainable fuel at the hybrid engine will be a very attractive output for the OEMs and their portfolios and provides another solution to the automotive, their carbonization drive across the world. I feel very positive about this probably in this area and have already have very productive conversations with existing and potential OEMs about the direction Formula One is moving in.

Continuing on this topic, we confirm the We Race As One platform will become our official ESG platform with the three core pillars of sustainability, diversity and inclusion and community. We are proud of the impact this platform as last year, and we'll continue with our action to push forward as a sport. In the coming weeks, I will meet with all the drivers to discuss with them our We Race As One plans for this year and beyond, including the rollout of our apprenticeship, internship and scholarship in our sport for underrepresented groups and very important of our heroes, role models and champions of progress in our sport that inspired fans around the world.

We are looking forward to season three of Drive to Survive hitting Netflix on March 19. This will once again capture all the drive men's story lines of 2020 and there's no question that series continue to bring new passion of the sport. I can't express enough my excitement for all the opportunity Formula One has in front of us. And I look forward to update you on our progress. But please be sure to watch the season opening Grand Prix in Bahrain on March 28.

And with that, once again, thank you so much. I will turn it over to you, Greg. Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

Thanks, Brian, thanks, Stefano and to our listening audience, we appreciate your continued interest in Liberty Media and hope you all staying safe and healthy. And operator, with that, I'd like to open the floor to questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question today comes from Vijay Jayant of Evercore.

Vijay Jayant -- Evercore -- Analyst

Thanks. I have two. First, Greg, obviously, with the tax sharing agreement with Sirius, that sort of kicks in 80%. Obviously, you mentioned that the board will decide how capital allocation works both at the moment, but given the float will be pretty small and I think dividends will be tax free both that. Is there an expectation that we should assume that will shift more toward dividends or the buybacks? Or are we strictly on a path to sort of taking the company private? And are there any obstacles sort of on that path? Is there like a squeeze out requirement of 90%? Anything you can share on sort of what happens to the equity capital structure sort of post the 80% level?

And second for Stefano, welcome. I just wanted to sort of get your perspective, you've been mentioned in the press, suggesting that you're looking for more quality over quantity in terms of races and obviously talking about sprint race, do you really think you need to change the format of the race? We can do [Indecipherable] paid practices and making it the biggest tactical? Can you just talk about what you really think is the opportunity to make that a weekend bigger event broadly? Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

So I'll go first and chat a little bit about dividends, capital allocation and the like. First of all, it really is a decision of the full board. You would know correctly that on the margin, we would probably have a slight tilt toward dividends, we at Liberty Media, Liberty Siri compared to where we once were. But it's really not that big a tilt, what we're looking at the discount to NAV running about just under 28%, substantially tightened from the 45% when the GME world blew up, and we were running more like in the mid to low-30s. So we have tightened it, but that's still quite large, compared to even 7% rate we would only pay with the DRD exclusion. So I don't think a huge sum on the scale for Liberty, we're marginally more oriented toward dividends, but not massively, but that decision really will be driven by management and the board.

As far as triggers, that might involve, I would say, the independent board will have to make their own decisions. But one thing, I think would likely be in the back of our minds that we get to 90%, we could do a short form squeeze out merger of the remaining 10%. So some directors might think about the pace at which we would get to that kind of a number. But again, those decisions really will be made by the full board and at some point, the independent directors will have voice about ensuring that the minorities appropriately protect it.

Stefano Domenicali -- President and Chief Executive Officer

Okay. That's my go to answer to the question with regard to the format on what we are thinking to improve in term of show. First of all, as you say that our objective is to try to offer to the people that are coming to the event, to the people that are watching television, to the people that are really fans of Formula One something that is exciting. So the idea that we have shared and I think that we have received a great feedback from everyone in the sport is that we will try to figure out something that would give us a qualified on Friday, Saturday sprint race that would determine the grid order for the Sunday race. So that we're thrilled of a great weekend that would be beneficial to all the party involved. And this is something that we are detailing with the teams and the FAI in the next weeks in order to present the final format before the start of the season in Bahrain. But that's the aim of what we tried to do this year in that respect.

Vijay Jayant -- Evercore -- Analyst

Thanks so much, both.

Operator

Our next question comes from David Karnovsky of JP Morgan.

David Karnovsky -- JP Morgan -- Analyst

Thanks for taking the question. Welcome, Stefano. Could you discuss the freeze on engine development and how you think this might impact on-track competition? And then just maybe expand a bit on their view of F1's long-term engine goals in light of some of the OEMs like GM and Jaguar moving toward all-electric vehicles?

Stefano Domenicali -- President and Chief Executive Officer

Well, thank you, David, for the question. I think that what is important to say that this idea of freezing one year in advance is connected to the new business sustainable approach that Formula One has taken. We have taken this year with the cost cap that is related to a certain part of the cost of managing the theme. The other part was not much, but very important was how we can capture the controllable investment cost as in the normal business on the power units. The four buyers associated the fact that we would anticipate that at the end of spending new money for a new engine, we were thinking how we can capture the attention of potential manufacturer, but also making sure that the ones that are evolved today, adding to that in the future.

So we do believe by building hybrids in the future is the exact position that will allow all the manufacturers, who have an access to a different portfolio, not only electrification to their normal business. So therefore, I think that what we are putting in place in that respect, having carbon neutrality, fully sustainable fuels at the center and hybrid gave us a really great position in term of package in term of being always at the pinnacle of technology of advanced research in Formula One and making sure that everyone can benefit from this activity also to have a sort of road relevancy, extra activities that can be beneficial to all the automotive manufacturer. And by doing that, we're going to have a win-win situation, a lot of attention of power units in a different way of all being electric having the cost control under control and of course being aligned with our value of being sustainable for the future. So these are the base of thinking that we're taking when we decided to go and follow this path.

David Karnovsky -- JP Morgan -- Analyst

Okay. And then I believe there is a number of race promotion contracts expiring at the end of this year. I think Singapore and the US. Just wondering how you're thinking about F1 is getting into these region versus maybe adding new races in other fly away markets I think you've mentioned South Africa recently? And with regards to Vietnam GP, is there any update you can provide on whether we might see that race at some point in the future?

Stefano Domenicali -- President and Chief Executive Officer

Well, yes. I mean, for sure, we are in a great moment because despite the pandemic, we are receiving an incredible number of requests by -- that shows that the F1 at the center of the interest, not only from the organizers all around the world, but also from the motorsport community. Therefore, our strategic plan is to decide first of all, what is the right dimension in term of races in the year. The contract you are mentioning are expiring, but there are discussion ongoing because they ones that you were considering are really important, and there is a lot of interest to progress and keep them also in the future.

We confirm, as you know, that US is very important and strategic markets for us, and we have the aim to add another race in US, we have already great [Indecipherable] but we are looking for other solutions that would be very important for us. What I can see with Vietnam for whatever reason that happened, you see, we didn't have the race, but for sure, that is an area far east in general that is very important for the strategic growth of our business in the future and for sure, that's an area, where we're going to exploit other opportunities for the future.

Gregory-B-Maffei -- President and Chief Executive Officer

And if I could just add to Stefano's comments, which I agree with, we do not have an unusual number of promoter contracts expiring this year or pretty much in any year. We have a portfolio, where a certain number get renewed every year just like we have a certain number of broadcast contracts which are renewed every year and in general, because we think demand will rise for our sport, we don't fear that we actually appreciate that because we think there's more opportunity to have them behind.

David Karnovsky -- JP Morgan -- Analyst

Thank you.

Operator

Our next question comes from Ben Swinburne of Morgan Stanley.

Ben Swinburne -- Morgan Stanley -- Analyst

Thanks, good morning guys. I wanted to ask both, definitely to Greg, just a question around sports rights and sort of the state of the market right now, maybe Europe and US. You guys had a very successful, at least based on the press reports, renewal in Germany with Sky last year. But we've seen some of the other deals that have happened or are happening have gone backwards, EPL, the Bundesliga and [Indecipherable] may roll back and even in the US, there has been probably more tension than usual and Greg, obviously with Sinclair, what's going on there and Fox Sports is clearly tricky with cord cutting.

So can you guys just give us sort of a sense as you move through 2021 and 2022, how are you feeling about your position both with F1 and the Braves? And if you think the market has gotten even more complicated and more challenging than it was a couple of years ago?

Gregory-B-Maffei -- President and Chief Executive Officer

Stefano, you want to take in kind or happy to.

Stefano Domenicali -- President and Chief Executive Officer

Okay. I mean, in my opinion the situation we already today is for sure interesting from one side, but very good on the other. I mean, what we can see there, as you know on our business model, the broadcaster partners are hugely important for us. But we can see very good opportunity to extend and explore different models to, as I said, to be complementary platforms and provide direct connection to the fan base, both in the OTT world that is still an area that we will for sure give an eye, a very important eye for the future.

But, to be honest, I do believe that if you are able to attract as we are doing this sport, the commercial account, because the interest is there, and we need to make sure that the sport we are shaping up for the future, give the context to make sure that is deliverable to the fans. And that's why we have a lot of activity connected to make sure that, first of all of course, we don't lose the traditional and very religious fans. But we need to speak the language of the new supporters, the new fans, the young generation. So we have a lot of progress to make sure that this is happening already this year. So I'm positive on that to be honest.

Gregory-B-Maffei -- President and Chief Executive Officer

I agree with Stefano's comments, but I'd add a couple more if I could, Ben. First, we've done a lot over the last few years. Thank you, Chase, and now thank you, Stefano, to try and build fan interest and fan excitement. And that's better on-track competition, that's a more balanced field that we -- as we go into '22, that's a lot of ancillary things like fan festivals, like programing, like Drive to Survive, all of those building fan interest, obviously eSports component as well. That's an important component when you obviously go for renewal, how much fan interest, how much excitement there is.

Probably the most important component is how much competition there is among potential bidders, distributors of your product. And candidly, the best deal we have probably is our UK deal and was largely because there were several bidders highly interested in getting our product. I do feel, as Stefano notes, we have a relative value. You've seen declines in some of the other higher-cost European alternatives. But if you look on any kind of basis about what cost per eyeball, cost per hour, etc, F1 looks like a relative value.

And I think a side note, Ben, which I'm sure you can appreciate, with the rising cost of alternatives like scripted content, as that gets more expensive in some ways it provides a floor on what the value of some of the live sports can be. Historically, live sports looks so expensive, maybe not quite as much when scripted continues to rise.

So I'm excited about F1's prospects, but above all, we would benefit from increased competition, which is potentially some of the new digital players entering, and they have sniffed. And we'll see if we can get them excited. I do believe ultimately they will be become bidders, and that will be to our benefit.

As far as looking back at US rights and the Braves, obviously, we've had a world where the bundle has caused a lot of over buying, whether it be for sports -- of all kinds of sports programing, including the RSNs. And if that bundle breaks, there is risk around what the total amount paid to teams will be, including the Braves.

I feel relatively good about the Braves. Our contract is through '27, first. And secondly, we have a good contract, but far and away not the highest, well below somebody like the Dodgers. But in contrast, we have the largest broadband household audience. So the Braves have the largest territory with 12 million broadband households. So the degree you look at digital alternatives and the like, we are probably in the best shape compared to many to benefit as new alternatives arise and the bundle potentially weakens.

Ben Swinburne -- Morgan Stanley -- Analyst

That's helpful. Good luck in the NL East this season. Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

Thanks. Thanks.

Operator

Our next question comes from Bryan Kraft of Deutsche Bank.

Bryan Kraft -- Deutsche Bank -- Analyst

Hi. Good morning. Couple of questions. First, can you -- Greg, can you talk about your current expectations for what I'll call the path to normalcy for your live event businesses looking out over '21 and '22? There's obviously a lot of focus in the market by investors on how quickly businesses like these are going to be able to bounce back and whether back half of '21 looks normal or '22 looks normal. So would just love to get your thoughts on what Formula One, Live Nation, the Braves, what that path looks like for them?

And then just quickly on the leverage target for Formula One. Can you just remind us what your target leverage ratio is. And is there any thought to running that balance sheet more conservatively in the future just given the experience with the pandemic, or are you still comfortable with that? Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

So I'll start on the opening. It's certainly not binary, and it's not binary in a lot of ways because at F1 and the Braves we have multiple sources of revenue. F1's got three big pillars, right: broadcast which was impeded but probably will be impeded less in '21 regardless of the pandemic; sponsorship and advertising, which was impeded less in 2020 than certainly the fan component or the promotion component, but again probably be less in '21. And then fans, and we are going to have a variety of alternatives where fans will be to some degree there. And I don't think, again, it will be binary. We're not necessarily going to see zero to 100. It will be somewhere potentially between, though I'm more optimistic as we go to the end of the year, we're going to get to 100% of capacity.

And the same thing with the Braves, multiple revenue streams, both television and on-site. But we don't really have is -- we do have sponsorship. It's not as large a component as it is at Formula One. I think, again, not binary. The expectation is we'll probably start out at 25%. I mentioned already that Georgia is relatively open. We will be in far better shape in terms of the fan attendance than if you were in New York or California or some other locales. And it will be decided not by baseball, but by the local rules and authorities. So the expectation is we will have increasing numbers there, but again not binary. I don't think we're going to go from 25 to 100 in the space of a flip of the switch.

And obviously Live Nation doesn't have -- has obviously advertising and sponsorship, but doesn't have the broadcast element. So it's the most responsive or vulnerable or affected by shutdowns. Offset to that is global business really with the potential for very different responses depending where you are in the world. So I think Formula One, in particular, is preparing for a balance sheet that is invincible with whatever comes. And we are fully supportive of that.

I do think they will have fans at events this year, but certainly you've already seen some of that and it will grow. They announced earnings slightly ahead of expectations I think just yesterday, but meaningful efforts. There will still be definitely work to be done throughout '21. So that's kind of -- that's probably somewhat of a non-answer, Brian, because we certainly aren't in the crystal ball business exactly. But we are in the business of trying to prepare to make sure we benefit when it does open and that we're prepared if that doesn't happen at the rates of -- or change or pace that we would like. And I think all three of those businesses are well prepared.

And that sort of turns to the balance sheet question. I think one of the things about being part of the Liberty Group is you can -- we have the ability to hopefully look ahead and be thoughtful with the benefit of our operating companies. The Formula One balance sheet is very, very strong. I think the operating levels that we have in our agreements are fine, and I -- obviously, they're strong both at the F1 operating level. And then when you look at the cash at the flawed level, it's quite strong. So I'm not really worried about the balance sheet.

Bryan Kraft -- Deutsche Bank -- Analyst

Great. Thanks for the color.

Brian J. Wendling -- Chief Accounting Officer and Principal Financial Officer

And just to answer your question real quick on the leverage target, our stated leverage target on Formula One is 5 times to 5.5 times. And as you recall, we have a -- our 8.25 max leverage has been waived through March 31, 2022. And when we bought the business, we had that approaching at eight times leverage, and we substantially delevered it not only through cash operations generated, but we did have a primary equity issuance as well. So both of those reduced the leverage even prior to the pandemic.

Bryan Kraft -- Deutsche Bank -- Analyst

Got it. Okay. Thank you. Thanks to you both. Appreciate it.

Gregory-B-Maffei -- President and Chief Executive Officer

Thanks.

Operator

Our next question comes from David Beckel of Berenberg Capital.

David Beckel -- Berenberg Capital -- Analyst

Thanks a lot for the question. Sort of piggybacking on your commentary about reopening. I was wondering if you could help us think about revenue recognition for the promotion side, really all the revenue streams under a variety of different scenarios. It seems as if the vaccine rollout for the most part is going better than expected in many parts of the world. Should we be thinking about race promotion revenue being materially affected in H1 or is that somewhat protected given the concessions you made last year?

And then sort of as a follow-up to that, I'd love to hear your thoughts to the extent you're willing to share, on how the team payment structure might affect earnings or EBITDA to F1 this year. Specifically maybe if you could frame it in reference of 2019 levels if your EBITDA level, pre-team EBITDA exceeds 2019, should we expect marginal upside in the current year?

Gregory-B-Maffei -- President and Chief Executive Officer

So I think promotion will be still reduced in 2021 certainly versus what we would have in a non-pandemic year. We will have restricted audiences and restricted fan at some of our events. So I do expect and we're not here to make a forecast in part because some of this is still up in the year and floating around. But also because that's what we like to let you do. So how much will be -- definitely be impacted the amount to which we'll see. And going forward, we have with the new Concorde Agreement, we have a structure, which as we increase profitability, we have the opportunity to take back some of what historically F1 earns comparatively over the years, the rates get a lot more attractive for us, whether we will hit that 2021, given the risks around pandemic, I'm not confident. But in the years going forward, as we continue to have a fully healthy business, I do believe our share of the margin will slightly increase.

Stefano, would you add anything?

Stefano Domenicali -- President and Chief Executive Officer

I couldn't agree more and I think that what is important that with the new governance, so with the new Concorde Agreement, with the new cost control measure, given the sustainability approach that allow us to think bigger and this is something that I do believe that is really the right fundamentals that drives the right way, both from the commercial point of view and also from the team perspective to be part of this incredible championship.

David Beckel -- Berenberg Capital -- Analyst

Great. Thanks, both.

Brian J. Wendling -- Chief Accounting Officer and Principal Financial Officer

Thank you.

Operator

Your next question today comes from David Joyce of Barclays.

David Joyce -- Barclays -- Analyst

Thank you very much. A couple of questions. One on the broadcast side of the Formula One business for this year. Would there be any lingering COVID-related impacts or should we think about it as being sort of comparable to 2019 and grossing up for step ups escalators and number of events? And then secondly, on the Braves, with the Sinclair RSN agreements and in this was already touched on a little bit earlier in the call, where do you stand with them moving toward having a hybrid over the top model? How does that play into your economics? And what could that do for further fan engagement even as that could tie into sports betting once that becomes something on the horizon in Georgia? Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

Thank you. So we expect a fairly normal broadcast revenue stream and lightest our 23 races now. Again, crystal ball about exactly how COVID plays out, but our goal was to try and take the pain in 2020 should agree that we rightly had to make concessions toward some of our broadcasters. Our goal was much as possible to make that a 2020 event and bring 2021 back to normal. So that is our hope and our expectation. But COVID could change that, just as a warning. And on the thinking about the RSNs, as I said, we have our contracts lengthening into 2027. I know Sinclair is trying to do some different things, it's not clear to me exactly what rights Sinclair has to do some of the that rates that they fixed, they can do or want to do.

And those have been some discussions with baseball about all charges. But I do not expect a major change assuming we can run a full 162-game schedule on a normal pace. I would expect, we would have normal revenue streams from Sinclair certainly in 2021 and through the rest of the contract. And I know whether they're new engagement model that will help us with Sinclair that could be and it will see again I'm not exactly sure what Sinclair things their rights are to do some of those things, but that's Mr. Ripley.

David Joyce -- Barclays -- Analyst

Then just finally on the COVID impacts on Formula One in broad strokes, how should we think about those promotion and sponsorship contracts in the mix between fixed and variable components? Is there a general algorithm that's baked into the contracts? Or how should we think about that?

Gregory-B-Maffei -- President and Chief Executive Officer

Look, most of them probably do not have triggers or any trigger that they do have, we will likely be able to meet. On the other hand, take a partner who is a large international airline doing basically gets shut down for all foreign travel, you can decide whether they're going to be a good partner with them or not for the long term and that's been our goal. So we will work with them in the way that we appreciate that they have worked with us during the difficult time.

David Joyce -- Barclays -- Analyst

All right. Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Jason Bazinet of Citigroup.

Jason Bazinet -- Citigroup -- Analyst

Thanks so much. I guess having extra liquidity is always a good thing, but I was wondering if there is any color you might add in terms of these amendments that you did unencumbered some of the passive equity stakes. Was there something specific that you were looking to do or some need that you have closed more just general optionality? Thanks.

Gregory-B-Maffei -- President and Chief Executive Officer

You know we're into optionality, Jason, but I'll let Ben Oren our relatively new Treasurer answer.

Ben Oren -- Senior Vice President and Treasurer

Sure. With respect to the Siri margin loan, we did do an upsize, but we kept this to the same billion shares collateralizing that loan as we had previously under the $1.35 billion. So we're just maximizing our ability to access dollars. With respect to Live, it's a really a function of what happened in the previous margin loan. We repaid it and we had a substantial number of shares [Indecipherable] collateral pool and so when we right size the loans to $200 million, we appropriately took the amount of shares underlying that to something that's closer to where the realistic LTV for our margin loan.

Jason Bazinet -- Citigroup -- Analyst

Okay. I understand. Thank you.

Operator

The next question comes from John Tinker of Gabelli.

John Tinker -- Gabelli -- Analyst

Thank you. Terrific numbers in the Battery and the Braves, which unfortunately, I think, get a little loss given those people focus on team. Do you have any or would you ever consider in any way highlighting the valuation of the team, your property in a different way?

Gregory-B-Maffei -- President and Chief Executive Officer

John, when we have great analysts like you writing up the value for us, we don't need to do with our commandants. No, but I think you're right, there is value in the Battery, it is impressive and it's a function both of Georgia being a relatively open place as we've noted, and I think really the great job that the Braves management team has done to create a secure environment, one where people are willing to come and it's open and going well. I'm not sure we're going to create a tracker or do something different around that, but we'll try and make sure we highlight appropriately that there is value in the Battery and our real estate developments. Thank you.

John Tinker -- Gabelli -- Analyst

Thanks.

Operator

And the final question today comes from Matthew Harrigan of Benchmark.

Matthew Harrigan -- Benchmark -- Analyst

Thank you. Even though Formula One probably generates more data than any other sports in concert with AWS and Intel and Qualcomm, it was really under-developed, under [Indecipherable] that we see with Bernie. You had a lot of success universal Grand Prix now. I think you've got a lot allowed to maybe have more looking and all that and cameras in the races necessarily. But can you talk about the potential there and how do you see that developing? It looks like you made some strides, but there is still a lot of headroom in terms of what you could do on the TV side in the video game side. Thank you.

Gregory-B-Maffei -- President and Chief Executive Officer

Yes. I think it's a great point, Matt. If you think about an evolving world, where we have increased starting on the sort of the broadcast side, but we have potential for increased digital players, the number of cameras we have, the angles we have, your ability to dial up what angle you want, that really plays perfectly to strength of those kind of digital players and different penetrated linear of speed. So I think we are a sports that will benefit from that increased attention on the digital side in terms of viewing. Different experience and one at the fan can tailor. I think you could see that opportunity ahead, it will be great.

The other point is that all that data is proprietary data. We have begun --we began to take advantage of through our contract with ISG that did now turn out as well as we like. But as we go forward and look at the opportunities around that, I do believe there is quite a lot around gambling, around fan information that is valuable and that we are in a very strong place well in the motorsports because the amount of data and the amount of which is proprietary. So I think on both side, that's a huge asset.

Matthew Harrigan -- Benchmark -- Analyst

Thanks, Greg.

Gregory-B-Maffei -- President and Chief Executive Officer

Thank you. So with that, operator, I think we're done. Thank you to our listening audience for your continued interest in Liberty Media, and we look forward to speaking with you again next quarter, if not sooner.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Courtnee Chun -- Chief Portfolio Officer

Gregory-B-Maffei -- President and Chief Executive Officer

Brian J. Wendling -- Chief Accounting Officer and Principal Financial Officer

Stefano Domenicali -- President and Chief Executive Officer

Ben Oren -- Senior Vice President and Treasurer

Vijay Jayant -- Evercore -- Analyst

David Karnovsky -- JP Morgan -- Analyst

Ben Swinburne -- Morgan Stanley -- Analyst

Bryan Kraft -- Deutsche Bank -- Analyst

David Beckel -- Berenberg Capital -- Analyst

David Joyce -- Barclays -- Analyst

Jason Bazinet -- Citigroup -- Analyst

John Tinker -- Gabelli -- Analyst

Matthew Harrigan -- Benchmark -- Analyst

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