Liberty Media Corporation - Series A Liberty Formula One · NASDAQ:FWONA
Liberty Media Corporation - Series A Liberty Formula One — Liberty Media Corp (FWONA, FWONB, FWONK, LLYVA, LLYVB, LLYVK, LSXMA, LSXMB, LSXMK) — Merger or Acquisition (November 2016)
29 slides from Liberty Media Corporation - Series A Liberty Formula One's merger presentation, Nov 16, 2016
Slide 1: Important notices and filings review
We encourage you to carefully review Liberty Media Corporation’s (“Liberty Media”) publicly available filings for additional information that may be relevant and that is not included in this presentation including, without limitation, Liberty Media's most recent Annual Report on Form 10-K and Quarte
Slide 2: Additional Information and Forward-Looking Statements
Additional Information Nothing in this presentation shall constitute a solicitation to buy or an offer to sell shares of Liberty Media’s Series C Liberty Media common stock (“LMCK Stock”) or any other series of its common stock. Liberty Media stockholders and other investors are urged to read the pr
Slide 3: 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 Liberty Media Group expected to be renamed Formula One Group upon second closing Ticker symbol expected to become FWON (A/B/K) at second closing Chase Carey serving as Chairma
Slide 4: 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 issuance would be on separate terms with new investors An
Slide 5: Unique Global Sports Entertainment Business
Unique Global Sports Entertainment Business Global sporting competition with massive reach a rich heritage and an iconic brand 21 Countries 5 Continents 21 Events in 2016 Over 400m Unique TV Viewers(1) 67 Year History Speed Luxury / Glamour High Tech Innovation $1.8b+ Revenues and $470m Unlevered Ca
Slide 6: Great Content
Great Content Dieter Zetsche & Nico Rosberg Sir Jackie Stewart & H. R. H. Prince Harry Najib Razak Prime Minister of Malaysia Reggie Bush & Daniel Ricciardo Gareth Bale 2016 Mexico Grand Prix
Slide 7: Growth Market for Premium Sports Rights
Broadcaster NBC CBS / FOX/ NBC/ ESPN Sky / BT ESPN / Fox / TBS NBC ESPN / Turner Current Term 2022–2032 (6 Olympics) 2014–2022 (9 Years) 2016–2019 (3 years) 2014–2021 (8 years) 2011–2020 (10 years) 2016–2024 (9 years) Growth Market for Premium Sports Rights Increase in Sports Media Rights Contracts
Slide 8: Recent Revenue Growth Trends
Recent Revenue Growth Trends... Recent revenue growth driven primarily by annual escalators in contractual revenue streams and optimizing race calendar Mix of and number of races Escalators in existing race promoter contracts Increasing value of live sports media rights Escalators in existing broadc
Slide 9: Build for the Future
Build for the Future Build onto existing management team by adding leaders who are credible within the sport and with investors to execute on new strategy, working closely with the teams and the FIA Evolve the structure of the business to better align incentives for all stakeholders including the FI
Slide 10: Low Risk Business Model With High Revenue Visibility
Truly global brand catering to attractive demographics F1 Championship on par with the EPL and Champions League, with added advantage of being global Majority of revenue streams under long term contracts, making F1 resistant to economic downturns Many high-quality and government counterparties Stagg
Slide 11: Significant Profitability and Cash Flow Conversion
Attractive margins and very low capital intensity generate best in class profitability and cash flow conversion Adjusted EBITDA(1) margins of 26% for LTM 7/31/2016 Unlevered FCF(2) margin of 26% for LTM 7/31/2016 representing unlevered cash flow conversion of 98% Largest cost item (team payments) pr
Slide 12: Risk factors for Formula 1
Formula 1’s revenue growth may be limited, if it is unable to execute, on favorable terms, race promotion, broadcasting or advertising and sponsorship contracts, which may occur, among other reasons, due to the challenge faced by promoters in earning a profit after payment of race sanction fees or g
Slide 13: Risk factors for Formula 1 (scanned)
0) Formula 1’s revenue growth may be limited, if it is unable to execute, on favorable terms, race promotion, broadcasting or advertising and sponsorship contracts, which may occur, among other reasons, due to the challenge faced by promoters in carning a profit after payment of race sanction fees o
Slide 14: Who Does What in F1
Who Does What in F1 F1 Formula 1 is the exclusive commercial rights holder of the FIA Formula 1 World Championship to 2110 Identifies racing venues and negotiates fees from promoters to host, stage and promote events Negotiates payments for broadcasting rights Produces International TV feeds (other
Slide 15: How F1 Works
How F1 Works Advertising / Sponsor Fees Global Partners / Official Suppliers Trackside advertisers / title sponsors Unique brand characteristics Typically 3 – 5 year deals Broadcasting Fees Mix of free-to-air and pay TV ~400m global viewers(1) Typically, 3 – 5 year deals with broadcasters Race Promo
Slide 16: How F1 Makes Money: Race Promotion
Fees paid to host, stage and promote F1 events Host city on world stage Promoter contracts typically have annual price escalators Promotion fees for non-European races are typically higher than European fees Between 2011 and 2015, race promotion revenues per race grew at 4.0% CAGR F1 retains broadca
Slide 17: How F1 Makes Money: Broadcasting
Typically, 3 to 5 year contracts with close to 100 broadcasters, currently distributing to over 200 territories Broadcasting revenues grew at 2.9% CAGR between 2011 and 2015 US broadcast revenues are currently negligible 400m unique TV viewers in 2015 globally(1) Viewership significantly influenced
Slide 18: How F1 Makes Money: Advertising
How F1 Makes Money: Advertising (14% of 2015 Revenue) Advertising revenues grew at 2.3% CAGR between 2011 and 2015 under typical 3 to 5 year contracts Viewers associate the brand with luxury, sophistication, speed and technology, a differentiated proposition for advertisers relative to most other sp
Slide 19: How F1 Makes Money: Additional Sources
How F1 Makes Money: Additional Sources (18% of 2015 Revenue) Hospitality, GP2/GP3 support series, freight & logistics, licensing for movies and games, and other (travel / TV production and post-production) Hospitality focused on VIP experiences at the track, with principal customer teams, sponsors a
Slide 20: Team Economics Under Concorde Agreements
Team Economics Under Concorde Agreements Based on data provided in Rencken, Dieter. “Revealed: How much F1 teams spend” Autosport. 26 November 2015. Based on 2015 Adj. EBITDA pre-team payment of $1,340m, defined as Revenue less operating costs, SG&A expense, FX and other adjustments; excludes team p
Slide 21: Formula 1 Financial Profile Overview
Formula 1 Financial Profile Overview Source: Liberty Media proxy filing and unaudited results for the twelve months ending 7/31/2016 obtained from monthly management reporting; LTM figures include a team payment contingency that gets trued up for presentation of year-end financial. Note: Please see
Slide 22: Liberty Media Trading Performance Following the Transaction
Liberty Media Trading Performance Following the Transaction
Slide 23: LMCK Trading Performance
LMCK Trading Performance Trading Performance Since Announcement Market Close Sep 6 – Market Close Nov 14 Indexed to 100 +39% Sep 7, 2016 Liberty Media announces the acquisition of Formula 1 for $8.0b Enterprise Value, $4.4b Equity Value Sep 12, 2016 Citi Equity Research piece released: Upgrade Liber
Slide 24: LMC Trading and Volume Dashboard
LMC Trading and Volume Dashboard LMC has traded up +39% since the transaction announcement at ~1.3x average daily trading volumes 7-Sep: Prior to Deal Announcement 14-Nov: Current Trading Last ADTV Multiple Equity 90 Days % of Equity % ? Since % of of ADTV Shares Price Per Value ADTV Total Price Per
Slide 25: LMCK Trading Price vs. Volume Pre- and Post-Announcement
Sep 7, 2016 Liberty Media announces the acquisition of Formula 1 for $8.0b Enterprise Value, $4.4b Equity Value LMCK Price vs. Volume Chart Since 7/1 ($) LMCK Trading Price vs. Volume Pre- and Post-Announcement Volume (in millions) 14-Nov 0 1 1 2 2 3 0 5 10 15 20 25 30 35 1-Jul 15-Jul 29-Jul 12-Aug
Slide 26: LMCK Price vs. Volume Chart
vs. Volume and Post-Announcement Size . LMCK Price vs. Volume Chart Since 7/1 Volume ) (in millions) 38 3 o 1SJul_ Jul Aug 26Aug Sep 23Sep_ TO ALO 4-Nov 14-Nov ul lmEVolume |= —=VWAP * @
Slide 27: 2016 F1 Teams
2016 F1 Teams Drivers: Daniil Kyvat Carlos Sainz Podium Finishes: 1 Championship Titles: NA Drivers: Fernando Alonso Jenson Button Podium Finishes: 391 Championship Titles: 8 Drivers: Romain Grosjean Esteban Gutierrez Podium Finishes: NA Championship Titles: NA Drivers: Kevin Magnussen Jolyon Palmer
Slide 28: 2016 FIA Formula 1 World Championship Calendar
16 – 18 Sep 2016 F1 Singapore Airlines Singapore Grand Prix 30 Sep – 02 Oct 2016 F1 Petronas Malaysia Grand Prix 21 – 23 Oct 2016 F1 United States Grand Prix (1) 11 – 13 Nov F1 Grande Prêmio Do Brasil 2016 (1) 07 – 09 Oct 2016 F1 Emirates Japanese Grand Prix 28 – 30 Oct F1 Gran Premio De México 2016
Slide 29: 2016 FIA Formula 1 World Championship Calendar
2016 FIA Formula 1 World Championship Calendar 2 xe e ee Shanta At siconosiens WP waxvensrarey sete Emirates Mele Cy 2s pn yee == = GS as GR >a siconosnens WY newt nccunioW xiconosmens WY urwisnmrox YP uevisnavmron . = nts tha havea title sponsor