Atlanta Braves Holdings, Inc. - Series A · NASDAQ:BATRA
Atlanta Braves Holdings, Inc. - Series A — Liberty Media — Investor Day (November 2016)
59 slides from Atlanta Braves Holdings, Inc. - Series A's investor day presentation, Nov 10, 2016
Slide 1: 2016 Investor Day
Liberty Media Corporation 2016 Investor Day November 10, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the proposed acquisition of Formula 1 (“F1”) (the “proposed acquisition”), the anticipated benefits of the p
Slide 3: Additional Disclaimers
Additional Disclaimers Important Note Regarding Formula 1 Financial Information This presentation includes certain financial information regarding F1, which is a privately-held foreign company. Accordingly, F1 does not provide periodic financial reporting materials similar to those filed by a public
Slide 4: Agenda
Agenda 8:00 – 9:00 Experience Liberty & Breakfast 9:00 – 9:10 Welcome………………….. Courtnee Chun 9:10 – 9:30 Liberty Media……………... Greg Maffei & Mark Carleton 9:30 – 9:50 SiriusXM………………….. Jim Meyer 9:50 – 10:10 Live Nation……………….. Michael Rapino 10:10 – 10:20 Atlanta Braves…………….. Terry McGuirk 10:20 –
Slide 5: "F-Winning" Greg Maffei – President & CEO
“F-Winning” Greg Maffei – President & CEO
Slide 6: Milestones Since Last Meeting
Milestones Since Last Meeting • Settled Vivendi litigation for pre-tax proceeds of $511m • Tracking stock recapitalization completed 4/15 • SiriusXM repurchase program has • Completed rights offering and raised • Announced agreement to acquire Formula increased Liberty Media ownership $203m in proce
Slide 7: Recent Performance Has Been Strong…
Recent Performance Has Been Strong… LMCA/K + STRZA + LBRDA/K + LSXMA/K + BATRA/K(1) • Composite CAGR of 14.5% versus 9.7% S&P and 13.6% NASDAQ As of 11/3/2016 $240 $220 $200 $180 STRZA Combined price per share $160 LBRDK $140 LBRDA $120 BATRK $100 BATRA LSXMK $80 LSXMA $60 LMCK $40 LMCA $20 $- (1) S
Slide 8: …and Long Term Returns Outstanding
…and Long Term Returns Outstanding Composite LMC(1) • Value per share up over 10-fold since issuance on 5/10/06 As of 11/3/2016 • Composite LMC CAGR of 26.2% versus 4.5% S&P and 7.7% NASDAQ $1,000 $900 LMC Composite Price per Share $800 $700 $600 $500 $400 $300 $200 $100 $- LMC Composite (1) See sli
Slide 9: Liberty SiriusXM Group
Liberty SiriusXM Group • Discount to NAV persists at ~15% • Potential explanations? • Supply demand dynamics of SIRI vs. LSXM • SIRI: $7b public float with ~$2b annual buyback program • LSXM: $11b public float with no active buyback activity • Speculation Liberty will pay premium to buy-in remaining
Slide 10: SiriusXM Capital Deployment
SiriusXM Capital Deployment • Growth in Adjusted EBITDA enabled annual buyback to outpace free cash flow without substantial increase in leverage • SIRI buybacks generated 7.6% IRR since 2013(1) • SiriusXM investment case continues to be levered return of capital through share buyback • Annual buyba
Slide 11: Gradual Decline in Recorded Music Revenue…But New Revenue Sources Growing
Gradual Decline in Recorded Music Revenue…But New Revenue Sources Growing Global Recorded Music Revenue ($ in billions) $20.0 Growth Rates 2005 – 2015: (25)% 2010 – 2015: Flat $16.0 2014 – 2015: +3% Synchronization $0.4b Performance Rights $2.1b $12.0 Streaming $2.9b $8.0 Digital $3.8b $4.0 Physical
Slide 12: Range of Music Experiences
Range of Music Experiences • Lean-back, discovery oriented services and newer on-demand services not mutually exclusive • Consistent growth in SiriusXM subscribers in tandem with rise of streaming only platforms • Proliferation of new services contributing to overall growth in music listening hours(
Slide 13: Rise of Streaming
Rise of Streaming $2.9b estimated revenue in 2015 with Global Recorded Music Revenues(1) approximately 57 players in U.S.(2)… Digital 26% Streaming 3% Performance Rights 9% Physical 60% Synchronization 2% 2005 …approximately 400 players globally(2) Digital 25% Streaming 19% Physical 39% Performance
Slide 14: Streaming Has Questionable Economics
Streaming Has Questionable Economics Already Scale Players Capped Revenue Opportunity • Increasingly two-horse race with already built global scale • Introduction of “Mid-Tier” offerings to drive adoption is undercutting nameplate $9.99/month price tag $9.99/month $3.99/month owners of Echo speaker
Slide 15: Lean Back: The "Free" Market
Lean Back: The “Free” Market • Terrestrial Radio is $17b(1) market commanding nearly 80% of U.S. listening hours • Revenues stable amidst influx of streaming music providers • Terrestrial Radio exempt from paying performance fees and songwriter fees are regulated • Better to compete with terrestrial
Slide 16: SiriusXM's Advantaged Business Model and Cost Profile
SiriusXM’s Advantaged Business Model and Cost Profile • SiriusXM is a proven profitable business, not just a 2015 Content Cost as a % of Revenue functionality Music • Portfolio of diverse, exclusive content secured under 84% long-term contracts Fixed terms with key content partners • Established dis
Slide 17: Meager Streaming Income to Artists; Touring Becomes Primary Source
Meager Streaming Income to Artists Touring Becomes Primary Source… Artists Receive Small Fraction of Revenue Paid Out by Streaming Companies Artist Platform Revenue per Play Monthly Plays Needed to Earn US monthly Minimum Wage ($1,260) Drake 2.9 billion Google Play $0.0073 172,206 plays TIDAL beats
Slide 18: …Leading to Another Record Year Expected for Live Nation
…Leading to Another Record Year Expected for Live Nation Live Nation benefits from bringing together growing supply and demand for live events Growing Supply of Live Events…. …Growing Demand for Live Events • Strong tour activity driving record setting • Increasing global fan bases for artists prope
Slide 19: Liberty Media Group: Transition to the Fast Lane
Liberty Media Group: Transition to the Fast Lane Components of Liberty Media Group (Since Tracking Stock Creation and F1 Announcement) Implied Value Increase Attributable PF Market Cap Value to New Formula One Group Pro Forma NAV: to F1 Acquisition 11/3/16 Holders $ in millions LMCK Shares to $741 F
Slide 20: Survey Says…Market Approves
Survey Says…Market Approves LMCK Share Price Performance Since Recapitalization (4/18/2016 – 11/3/2016) $30.00 $25.00 $20.00 LMCK +23% post F1 $15.00 announcement on 9/7/16 $10.00 $5.00 $0.00 4/18/16 5/6/16 5/24/16 6/11/16 6/29/16 7/17/16 8/4/16 8/22/16 9/9/16 9/27/16 10/15/16 11/2/16 Note: Market d
Slide 21: Transaction Structured to Benefit All Parties
Transaction Structured to Benefit All Parties Buyer Legacy F1 Owners(1) Teams Fans • Operating control of asset • Partially monetize asset • Opportunity to participate in • Stability from long-term • Non-voting LMCK issuance • Maintain ownership interest investment of Formula 1 ownership maintains v
Slide 22: Strategic Rationale for Formula 1 Acquisition
Strategic Rationale for Formula 1 Acquisition Iconic Global Sporting Massive Reach Attractive Financial Profile Competition • Rich 67-year history • 5 Continents • Diverse revenue streams • Unique scale global sports league • 21 Countries • Multi-year contracted revenues • 21 Events in 2016 • Asset-
Slide 23: Global Fan Base with Unparalleled Popularity
Global Fan Base with Unparalleled Popularity Wide Sphere of Influence Consistent Sell-Out Attendance Backed by Attractive Sponsors 2015 Race Race Day Attendance(1) Chris Bosh & Britain 140,000 Dwayne Wade Mexico 134,850 Royalty USA 101,667 Melbourne 101,500 By comparison... Avg. race attendance(2):
Slide 24: Formula 1 Fun Facts
Formula 1 Fun Facts 1.5 billion Cumulative TV broadcast audience for 2015 season 1.923 Seconds is world record pit stop time (Red Bull Racing 2013 and Williams 2016) 3 Number of kilograms driver loses during course of average race due to temperature and g-force 4 Number of seconds for an F1 car to a
Slide 25: Formula 1 Significant Profitability and Cash Flow Conversion
Formula 1 Significant Profitability and Cash Flow Conversion • Attractive margins and very low capital intensity generate LTM 7/31/16 Cash Flow Bridge best in class profitability and cash flow conversion $1,829 ($ in millions) • Adjusted EBITDA(1) margins of 26% for LTM 7/31/2016 Represents % of Rev
Slide 26: Recent Revenue Growth Trends...
Recent Revenue Growth Trends... • Recent revenue growth driven primarily by annual escalators in contractual revenue streams and optimizing race calendar 21 ($ in millions) Races • Minimal net growth in advertising & 19 • Increasing value of sponsorship revenues Races live sports media rights • Mix
Slide 27: …Multiple Areas for Future Upside
…Multiple Areas for Future Upside 1 Race Promotion • Increase number, optimize mix and enter new strategic markets • Optimize locations to best monetize value from other revenue streams (i.e. sponsorship and digital) • Key focus on Europe as foundation of F1 with additional opportunities in Americas
Slide 28: Mark Carleton – CFO
Mark Carleton – CFO
Slide 29: Braves in Strong Position to Grow Long-Term Value
Braves in Strong Position to Grow Long-Term Value • Excellent long-term opportunities for team, ballpark and mixed-use • Experienced, long-tenured management team • Braves have historically been rational and thoughtful in building and investing in team talent • Minor League system back in top tier •
Slide 30: Ballparks Are a Proven Catalyst for Surrounding Real Estate Appreciation
Ballparks Are a Proven Catalyst for Surrounding Real Estate Appreciation • Numerous precedent mixed-use developments • 1060 Project (Wrigley Field) Case Study: Lower Downtown Denver • Downtown Commons (Golden 1 Center) • L.A. Live (Staples Center) • Braves are breaking new ground in building ballpar
Slide 31: Braves Group NAV
Braves Group NAV $ in millions Note: NAV figure excludes tax liabilities; market data as of 11/3/2016. (1) Implied valuation based on 4.5x revenues (average of recent U.S. professional sports franchise sales excluding Los Angeles Clippers); assuming year-one revenue uplift of 21% (average of year-on
Slide 32: Appendix
Appendix 32
Slide 33: Composite LMC – It All Adds Up
Composite LMC – It All Adds Up • 5/9/06: LCAPA (“LMC”) tracking stock issued As of 11/3/2016 • 3/3/08: LMC issues LMDIA/B 4-for-1 • 11/19/09: DTV spun from LMDIA 1-for-1; remaining assets LMCA 6.76 become LSTZA on a 0.10-to-1 basis LSTZA tracker 75.17 • 11/28/11: LMC re-combines with LSTZA on a 0.88
Slide 34: Liberty Media Corporate Debt
Liberty Media Corporate Debt $ in millions $ in millions As of 9/30/16 $1,951 Liberty SiriusXM Group $250 Margin Loan $250 Braves Group $220(1) Stadium Facilities $129(2) $1,481 Mixed-Use Facilities $34 Other ANLBC debt(3) $57 Liberty Media Group $1,481 1.375% convertible notes due 2023(4) $1,000 $2
Slide 35: Recapping Formula 1 Acquisition
Recapping Formula 1 Acquisition • Announced definitive agreement to acquire Formula 1 on 9/7 • F1 assets and liabilities to be attributed to Liberty Media Group Overview • Liberty Media Group expected to be renamed Formula One Group upon second closing • Ticker symbol expected to become FWON (A/B/K)
Slide 36: Pro Forma Formula One Group Ownership Structure
Pro Forma Formula One Group Ownership Structure • Liberty will issue 138m non-voting LMCK shares ($2,932m as of transaction announcement(1)) • Liberty has agreed to seek to raise additional funds from outside investors (including teams) to reduce equity payable to selling shareholders • Any such iss
Slide 37: Summary of Existing and Incremental Ballpark Financing
Summary of Existing and Incremental Ballpark Financing Ballpark Financing ($ in millions) Other Total $800 Municipal Liberty Braves Ballpark Cost Funding StadCo Debt $700 $19 Municipal Other $600 $207 Bond Municipal Funding Funding $500 $5 $400 $722 $300 $368 $200 Liberty Braves StadCo Debt(1) $100
Slide 38: Summary of Existing and Incremental Mixed-Use Financing
Summary of Existing and Incremental Mixed-Use Financing Mixed-Use Financing ($ in millions) Third Party Total Mixed-Use $600 Braves Group Funding(3) Facility Cost Braves Group Equity Project Level Debt $41 $500 $30 $400 $256 Third Party $300 Funding(3) Braves Group $558 Equity(2) $27 $200 $170 $100
Slide 39: Overview of 2.25% Exchangeable Senior Debentures due 2046
Overview of 2.25% Exchangeable Senior Debentures due 2046 • Attributed to Liberty Media Group • $445m Exchangeable Senior Debentures • 2.25% quarterly-pay coupon • Final maturity in 2046 with put-call in 2021 • Reference 4.25m TWX shares attributable to debentures • Exchange price of $104.55 • 9.562
Slide 40: Overview of 1.375% Cash Convertible Notes due 2023
Overview of 1.375% Cash Convertible Notes due 2023 • Attributed to Liberty Media Group • $1b Convertible Senior Notes • 1.375% semi-annual coupon • Final maturity 2023 • Cash settle • Strike price of $47.43 • Basket of securities includes: • 21.0859 shares of LSXMA • Based on 1.000 LSXMA component •
Slide 41: Reconciling Schedules
Reconciling Schedules This presentation includes a presentation of free cash flow, which is a non-GAAP financial measure for SiriusXM. Free cash flow is derived from cash flow provided by operating activities, net of additions to property and equipment, restricted and other investment activity, and
Slide 42: Atlanta Braves November 2016
ATLANTA BRAVES NOVEMBER 2016
Slide 43: Disclaimer
Disclaimer Braves Holdings, LLC (the “Company”) and its directors, officers, employees, affiliates, agents, advisors and representatives (collectively, “Associates”) make no representation or warranty, express or implied, as to the accuracy or completeness of the information in this presentation or
Slide 44: Braves History Dating back to 1871
Braves History Dating back to 1871 As one of the National League’s two remaining original charter franchises, the Braves organization was founded in 1871 and stands as the oldest continuously playing team in major North American sports Long-Standing Franchise Fundamentals On Field Success • Consiste
Slide 45: Braves Status Report
Braves Status Report SunTrust Park on time and on budget for opening day on April 14, 2017 Ballpark & Battery Atlanta progressing according to schedule Mixed-Use Includes Comcast Office Building, Omni Hotel, Coca-Cola Roxy Theatre, 531 residential units and retail opportunities totaling 1,350,778 sq
Slide 46: Player Acquisition Strategy
Player Acquisition Strategy Continued re-tooling organization at all levels via free agent Braves Minor League Teams signings, trades of Major League talent in exchange for prospects, draft picks or International bonus Minor League system rebuilt into top tier system as noted by ESPN and Baseball Am
Slide 47: SunTrust Park Highlights
SunTrust Park Highlights SunTrust Park on-track and on-budget for opening day April 14, 2017 Situated in heart of “Braves Country”, where ticket-purchasing fan concentration is most dense Project 50% of tickets sold via full and/or partial season tickets by opening day Remaining tickets for groups,
Slide 48: Enhanced Revenue Streams
Enhanced Revenue Streams Turner Field SunTrust Park ~400 Premium seating (ex. suites) w/ ~3,800 Premium seating w/ average revenue of average revenue of $64,000 per game $653,000 per game 1 Premium club 3 Premium clubs plus 2 Group Club spaces (provides incremental value and revenue opportunities fr
Slide 49: Sponsor Sales
Sponsor Sales • The Braves have sponsorship agreements with the following partners, among others: – SunTrust (naming rights partner) – Coca-Cola – Chick-fil-A – Delta – Miller Coors – Comcast – Napa Auto Parts – Home Depot – Infiniti • Our major sponsorship contracts have an average length of over 1
Slide 50: Battery Atlanta Overview
Battery Atlanta Overview Braves purchased 82 acres of land for SunTrust Park and Battery Atlanta Conveyed 16 acres to Cobb County for portion underlying ballpark Approximately 54 acres in current phase of mixed-use development with 12 acres remaining for future development phases Brand new mixed-use
Slide 51: Battery Atlanta Status Update
Battery Atlanta Status Update Mixed Use Component % Complete(1) % Bought Out(2) % Leased(3) Residential 45% 98% Begins Q1-17 Retail 59% 95% 71% Comcast Office 71% 98% 100% Omni Hotel 25% 70% N/A Entertainment(4) 70% 90% 94% Mixed-Use Infrastructure(5) 80% 82% N/A (1) % Complete: Percentage of projec
Slide 52: Appendix
Appendix
Slide 53: The Battery Atlanta – Retail
The Battery Atlanta – Retail Square Footage 375,000 sq. ft. Braves Ownership 85% JV Partner Fuqua Development Estimated Opening Spring - Winter 2017 Revenue Source Rental income from tenants • 5 total blocks: 3 under residential and 2 standalone • Large format tenants – Soft goods, Fashion brands –
Slide 54: The Battery Atlanta – Residential
The Battery Atlanta – Residential Square Footage 500,000 sq. ft. • 531 residential high-end apartment units Braves Ownership 85% • 328 1-bedroom • 195 2-bedroom JV Partner Pollack Shores • 8 3-bedroom ~40% Spring 2017 Estimated Opening ~40% Fall 2017 • Each building has 1 floor of retail under 5 flo
Slide 55: The Battery Atlanta – Office
The Battery Atlanta – Office • Braves and Comcast announced a multi-year technology Square Footage 250,000 sq. ft. and real estate partnership in March 2015 Braves Ownership 100% • Deliver multi-terabit network capabilities to SunTrust Park Key Tenant Comcast and surrounding community • Enables the
Slide 56: The Battery Atlanta – Hotel
The Battery Atlanta – Hotel Square Footage 250,000 sq. ft. Braves Ownership 50% JV Partner Omni Hotels and Resorts Estimated Opening Winter 2017 Revenue Source Business and Leisure Travelers • Omni to operate hotel and receive management fee • Luxurious Omni property will be a full-service hotel and
Slide 57: The Battery Atlanta – Entertainment
The Battery Atlanta – Entertainment Entertainment Block: ~130,000 sq. ft. | Featuring Coca-Cola Roxy Theatre: 53,000 sq. ft. Source: atlanta.braves.mlb.com Source: atlanta.braves.mlb.com • The Braves and concert promoter Live Nation struck a deal in July 2015 to develop and manage a long-planned ent
Slide 58: Improved Access at SunTrust Park
Improved Access at SunTrust Park • Fans have 14 points to access ballpark from any direction Planned Transportation Improvements with multiple corridors dispersing traffic across broader area – Braves fans will have access to real time information that can re- route them to another access point • Sp
Slide 59: Glossary
Glossary BA = Batting Average HR = Home Run NL = National League RBI = Runs Batted In OBP = On-Base Percentage SLG = Slugging Percentage 18