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Formula 1 Profit Jumps Amid Growth Year for Racing Brand

Liberty Media, the company controlled by billionaire mogul John Malone that owns such assets as audio entertainment giant SiriusXM and the Formula 1 racing circuit, reported fourth-quarter financials on Wednesday, touting growth at Live Nation Entertainment, which recently posted a record 2023 and projected continued momentum in 2024.

Live Nation is “capitalizing on the globalization of the music industry, with 2024 already poised to surpass a record 2023,” Liberty Media CEO Greg Maffei said in the earnings update.

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Quarterly revenue at the Formula 1 Group’s revenue jumped from $754 million to $1.23 billion, the company disclosed in its earnings report. SiriusXM, the home of Howard Stern, recorded a slight gain in revenue for the final quarter of 2023 to $2.29 billion.

In terms of operating profit, Liberty SiriusXM Group posted a decline from $529 million to $455 million profit for the fourth quarter, while the Formula 1 operating result jumped from a profit of $41 million to a profit of $122 million.

Liberty on Wednesday also listed the fair value of its equity investment in Live Nation as nearly $6.52 billion as of the end of 2023, up from $5.78 billion as of the end of September. “We have an incredible pipeline for 2024, with no signs of a consumer slowdown. We’re seeing strong demand across all price points,” Maffei told Wall Street analysts about Live Nation during a morning call after the disclosure of his company’s latest financial results.

“Liberty had a productive 2023,” added Maffei in the statement accompanying his financial results. “We split off the Atlanta Braves, created the Liberty Live Group tracking stock and announced the combination of Liberty SiriusXM Group with SiriusXM,” he said.

Maffei added: “Formula 1 had another fantastic year with double-digit growth across all revenue streams. The Las Vegas Grand Prix generated massive global buzz, and we look forward to delivering great racing, fan experiences and economic benefit to F1 and the local community for years to come.”

Maffei told analysts SiriusXM rebuilding its tech stack and relaunching its streaming app would allow the audio entertainment company to continue to sign up streaming-only subscribers beyond car drivers. “The strong margins and free cash flow generation remained largely due to cost discipline,” he added.

Stefano Domenicali, CEO of the Formula One Group, reminded analysts that, as the auto racing juggernaut enjoys a global resurgence in popularity, there’s more media players including tech giants who would have an interest in acquiring the worldwide media rights to Formula 1 races.

“As we have said, alternative bidders, including digital players, are showing interest in live sports, increasing competition for sports media rights,” he insisted. Formula 1 recently signed a 10-year rights deal with Qatar’s beIN Sports in the Middle East, and the U.S. deal with ABC, ESPN and ESPN+ to air races through the 2025 season is coming up for renewal for the 2026 Formula 1 season.

“That will be a very important deal we need to discuss in the right moment,” Domenicali told analysts. On the call, Maffei also addressed the fast-changing TV sport rights space. “Overall, on whether you’re positive or negative, I feel very positive about the sport properties we’re involved withI remain in general bullish on sports rights, given the multiplicity of buyers and in particular bullish on the sports rights to the properties we’re involved with,” he added, pointing to the Atlanta Braves and Formula 1 both having impressive fan demand.

On the ESPN rights renewal, Maffei said he expected Disney to pay more for the Formula 1 rights after negotiations are concluded. “You have one of the cases where you have massive growth in fan interest and we can show statistically how much our fan interest has grown across all sorts of platforms. We have a desirable, upscale audience. We have a younger audience, a lot of factors ESPN or anybody else would want to bring to the party,” Maffei said.

“So I think there’s a lot of reasons why we can make the case that our media rights in the U.S. are more valuable and there will be likely a multiplicity of players and we will likely get a better number,” he added.

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