Atlanta Braves Holdings, Inc. - Series A · NASDAQ:BATRA
Atlanta Braves Holdings, Inc. - Series A — Liberty Media — Investor Day (November 2019)
50 slides from Atlanta Braves Holdings, Inc. - Series A's investor day presentation, Nov 21, 2019
Slide 1: Liberty Media Corporation 2019 Investor Day
Liberty Media Corporation 2019 Investor Day November 21, 2019
Slide 2: Disclaimers
Disclaimers 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 business strategies, market potential, new service and product launches, Formula 1 tax considera
Slide 3: Disclaimers (cont'd)
Disclaimers (cont’d) Industry Information Certain information included herein concerning Liberty Media’s businesses and the related markets or industry position or prospects, as well as industry or market data and other statistical data regarding Liberty Media’s businesses and industries, are based
Slide 4: Agenda
Agenda 8:00 – 9:00 Experience Liberty & Breakfast 9:00 – 9:15 Welcome………………….. Courtnee Chun 9:15 – 9:35 Liberty Media……………... Greg Maffei & Brian Wendling 9:35 – 9:55 SiriusXM………………….. Jim Meyer 9:55 – 10:15 Formula 1………………….. Chase Carey 10:15 – 10:35 Live Nation……………….. Michael Rapino 10:35 – 10:
Slide 5: 2019 Investor Day Logistics
2019 Investor Day Logistics Tag #LibertyInvestorDay Wifi Network: Marmorino Wifi Password: orange21
Slide 6: Audio…Liberty Still Loves You
“Audio…Liberty Still Loves You” Greg Maffei – President & CEO
Slide 7: Greatest Hits Since Last Meeting
Greatest Hits Since Last Meeting • Closed Pandora acquisition on 2/1 • Announced 2020 calendar, including • Won NL East division title for • Repurchased all shares issued in 22 races for the first time 2nd straight season acquisition at $5.90 average price versus • New races in Vietnam and Netherlan
Slide 8: LMC Composite Price per Share
Continuing History of Strong Returns Composite LMC • Value per share up nearly 18-fold since issuance in May 2006 • Composite Liberty Media CAGR of 24% versus 6% S&P and 10% NASDAQ $1,600 $1,400 LMC Composite Price per Share $1,200 $1,000 $800 $600 $400 $200 $0 FWONA LMDIA LSTZA DTV STRZA LGF/B FWON
Slide 9: Discount at LSXM = Opportunity
Discount at LSXM = Opportunity $350m+ in value relative to Life-to-date repurchases: underlying SIRI 20.7m LSXM shares for $859m Average SIRI look through price: $4.45 per share 29% average discount to market Our equity in SunTrust Park 1st Announcement of the Day: Another SIRI Exchangeable 9
Slide 10: Substantial Leverage Reduction; Updated F1 Leverage Target to 5.0x – 5.5x
Substantial Leverage Reduction; Updated F1 Leverage Target to 5.0x – 5.5x • Strong business operations drove meaningful free cash flow generation for leverage reduction • 2nd Announcement of the Day: New F1 leverage target of 5-5.5x • Maintaining leverage below 5.5x allows greater financial flexibil
Slide 11: As F1 Revs That Virtuous Circle…
As F1 Revs That Virtuous Circle… Cost Cap More equitable New car specs prize distribution Improved On-Track Competition Economic Sustainability Increased Fan Engagement Increasing $$ Sponsorship for Teams Broadcast Funds Growth Promoter Value Initiatives 11
Slide 12: …F1 and FWON Expanding Free Cash Flow
…F1 and FWON Expanding Free Cash Flow FWON Cumulative Free Cash Flow (2020 through 2023) ($ in millions) F1 Free Cash Flow(1) $1,600 (1) OpCo Leverage Capacity (within 5.0-5.5x Target) $800 Estimated Restricted Payments $250 F1 Free Cash Flow $2,650 FWON Monetizeable Corporate Assets (i.e. BATR, pri
Slide 13: Capital Allocation Alternatives with FWON Excess Free Cash Flow
Capital Allocation Alternatives with FWON Excess Free Cash Flow • Return of capital – most likely via share repurchase • 3rd Announcement of the Day: Increasing Liberty Media share repurchase authorization by $1b • Please recognize the total authorization of $1.4b is available to all the trackers •
Slide 14: Reviewing Liberty Media's 1.375% Cash Convertible Notes due 2023
Reviewing Liberty Media’s 1.375% Cash Convertible Notes due 2023 • In 2013, Liberty issued $1 billion of 1.375% Cash Convertible Notes due 2023 • Cash settlement based on basket of FWONA, LSXMA and BATRA shares • Bonds issued +22.5% conversion price • Simultaneously purchased call spread that increa
Slide 15: Mitigating Convertible and Warrant Exposure at FWON by Buying LSXMA/K Shares
Mitigating Convertible and Warrant Exposure at FWON by Buying LSXMA/K Shares Share Purchase Overview • 4th Announcement of the Day: FWON will begin to purchase LSXMA/K shares • LSXMA/K shares purchased will be retired and accounted for as intergroup interest at FWON Benefits to FWON Shareholders Ben
Slide 16: Liberty Investor Day
Liberty Investor Day There are no webcast slides to accompany this portion of the presentation 16
Slide 17: Brian Wendling, Principal Financial Officer
Brian Wendling Principal Financial Officer
Slide 18: Liberty SiriusXM Group and Formula One Group Debt
Liberty SiriusXM Group and Formula One Group Debt Liberty SiriusXM Group Formula One Group ($ in millions) ($ in millions) $8,959 $4,979 Other corporate 2.125% SIRI Exchangeable Bonds level debt $385 2.25% LYV Exchangeable Bonds $400 $32 $210 2.25% AT&T Exchangeable Bonds $450 1% FWONK Convertible N
Slide 19: Liberty SiriusXM Group Liquidity & Monetizable Assets
Liberty SiriusXM Group Liquidity & Monetizable Assets ($ in millions) SIRI shares pledged to $22,721 margin loan $6,880 SIRI shares underlying 2.125% exchangeable bond $15,497 $343 Total Public Equities 3.2b SIRI shares $21,867 7.0m IHRT shares Unencumbered and warrants Public Equities $14,643 2.1b
Slide 20: Formula One Group Liquidity & Monetizable Assets
Formula One Group Liquidity & Monetizable Assets ($ in millions) LYV shares encumbered by $6,051 margin loan $3,472 Total Public Equities 69.6m LYV shares 9.1m BATRK shares $5,032 6.1m AT&T shares LYV shares underlying 2.25% 1.9m VIAB shares exchangeable bond BATRA shares covered by 1.375% cash Unen
Slide 21: F1 Maintains Strong Free Cash Flow Generation
F1 Maintains Strong Free Cash Flow Generation FWON Free Cash Flow (% F1 Adj. OIBDA) • Attractive margins and very low capital intensity F1 OpCo - 5-yr. Avg. • Largest cost item (team payments) primarily variable F1 Adj. OIBDA 100% • Advance payments of promotion revenue can result in Working Capital
Slide 22: Substantial Interest Savings from F1 Debt Restructuring
Substantial Interest Savings from F1 Debt Restructuring F1 Annual Interest Expense • Reduced spread to L+300 and upsized 1st lien TLB by $200m $ in millions • Fully repaid $1b 2nd lien TLB and Euro tranche of 1st lien TLB $270 • Upsized RCF to $500m at L+675 • Reduced spread to L+250 and repaid $400
Slide 23: Understanding F1 FX Exposure
Understanding F1 FX Exposure • Roughly 80% of F1 revenue US$ denominated Approximate Revenue Exposure by Currency • P&L exposed to both transactional and translational GBP moves in FX 13% • Team payments impacted by transactional FX gains and EUR 7% losses, thereby sharing in exposure with F1 AUD &
Slide 24: Appendix
Appendix 24
Slide 25: Liberty Media Convertible / Exchangeable Debt Cheat Sheet
Liberty Media Convertible / Exchangeable Debt Cheat Sheet 1.375% Convert. Notes 1.0% Convert. Notes 2.25% Exchange. Debent.(2) 2.25% Exchange. Debent. 2.125% Exchange. Debent. Description Issuing Entity Liberty Media Corporation Attributed Formula One Group Formula One Group Formula One Group Formul
Slide 26: Detailed Overview of 1.375% Cash Convertible Notes due 2023
Detailed Overview of 1.375% Cash Convertible Notes due 2023 • Attributed to Formula One Group • $1b Convertible Senior Notes • 1.375% semi-annual coupon • Final maturity 2023 • Cash settle • Basket of securities per $1,000 notes includes: • 21.0859 shares of LSXMA • Based on 1.000 LSXMA per basket •
Slide 27: Braves Group Debt
Braves Group Debt As of 9/30/19 Total Outstanding Maturity ($ in millions) Capacity Team Operating Debt MLB Leaguewide Credit Facility $100 $45 2020 SunTrust Revolver $85 $- 2023 Non-recourse to Braves Holdings Secured by various revenue streams, including: Spring Training Facility $39 $30 2022 • Na
Slide 28: F1 Financials – Revenue Recognition
F1 Financials – Revenue Recognition Calendar and timing of races has significant impact on quarterly reported results • Promotion revenue recognized on day of each race • Broadcast revenue recognized pro-rata across race calendar, with some variation due to FX movements • Advertising & Sponsorship r
Slide 29: F1 Financials – Cost Recognition
F1 Financials – Cost Recognition • Team payments • Expense recognized pro-rata across race calendar • Cash payments: • Variable prize fund paid in fairly even installments across months of March – November with “true-up” points • Final true-up balance paid post-season (February) • Fixed prize fund p
Slide 30: F1 Tax Considerations
F1 Tax Considerations • F1 expects to be UK taxpayer in 2019 and future years • F1 cash generating entities are UK based • UK interest expense deductions are limited to 30% of UK EBITDA • Estimated future cash taxes for F1 (primarily UK) expected to be single digit percentage of adjusted OIBDA (as r
Slide 31: Composite LMC – It All Adds Up
Composite LMC – It All Adds Up • 5/9/06: LCAPA (“LMC”) tracking stock issued • 3/3/08: LMC issues LMDIA/B 4-for-1 • 11/19/09: DTV spun from LMDIA 1-for-1; remaining assets become LSTZA on a 0.10-to-1 basis FWONA 10.22 LSTZA tracker 117.11 • 11/28/11: LMC re-combines with LSTZA on a 0.88129-for-1 DTV
Slide 32: Footnotes and Other Sourcing Information
Footnotes and Other Sourcing Information • Slide 7 • Liberty SiriusXM’s ownership in SiriusXM based on undiluted share count as of 10/29/19. • iHeart diluted ownership as of 11/4/19. • F1 attendance increase through Brazil and viewership increase through Singapore. • F1 leverage as of 9/30/19. • Sli
Slide 33: Footnotes and Other Sourcing Information (cont'd)
Footnotes and Other Sourcing Information (cont’d) • Slide 20 • Excludes potential tax implications from monetization of any asset. • BATRK shares represent intergroup interest held at Formula One Group. • Live Nation margin loan undrawn as of 9/30/19 with total capacity of $600 million. • Cash and c
Slide 34: Non-GAAP Information
Non-GAAP Information This presentation includes presentations of adjusted OIBDA and net operating income for Braves Holdings, which are non-GAAP financial measures, together with reconciliations to operating income, as determined under GAAP. Liberty Media defines adjusted OIBDA as operating income (
Slide 35: Atlanta Braves – Investor Update
ATLANTA BRAVES – INVESTOR UPDATE November 21, 2019
Slide 36: Mike Plant
Mike Plant President and CEO Braves Development Company 2
Slide 37: The Braves set a new strategic direction in 2013
The Braves set a new strategic direction in 2013 to ensure long-term success and better fan engagement 1. Invest in a state-of-the-art stadium 2. Purchase and develop land surrounding land for 365-day/year destination 3. Strategically rebuild the baseball team The Braves have accomplished all 3 goal
Slide 38: Industry leading fan experience and strong revenue-enhancing opportunities
Industry leading fan experience and strong revenue-enhancing opportunities ▪ SunTrust Park is a unique, state-of-the-art venue which offers an intimate setting for fans to feel a part of the game ▪ Fan experience pre- and postgame has been vastly improved by The Battery Atlanta bars, restaurants and
Slide 39: Key Performance Indicators prove strategic imperatives are working
Key Performance Indicators prove strategic imperatives are working 2016 Turner Field (1) 2017 SunTrust Park 2018 SunTrust Park 2019 SunTrust Park Inaugural Season (1) Season 2 (1) Season 3 (1) (1) Stats based on club data; Sponsorship dollars based on October 2019 forecast 5
Slide 40: Operational Excellence sets us apart
Operational Excellence sets us apart Gate Entry Concessions Business Intelligence Alternate Stadium Usage Efficiency Through-put Drives player evaluation, Concerts and other events, such 2220 extra guests Kaizen business process dynamic pricing, promotional as US Ski & Snowboard’s “Big per hour, per
Slide 41: The Battery Atlanta – a transformative, 365-day mixed-use destination
The Battery Atlanta – a transformative, 365-day mixed-use destination and a new model for sports venue master planning 34% YOY NOI Growth (1) 2013 2019 2021 ▪ Acquired 82 acres of land ▪ 98% of leasable sf under lease ▪ 600k sf office/conference/lab ($135M with unremedied ▪ Retail tenant makeup prim
Slide 42: The Atlanta Braves are an elite baseball organization
The Atlanta Braves are an elite baseball organization ▪ The Braves won 97 regular season games, securing their 2nd consecutive postseason appearance and 2nd straight National League East Division title ▪ Three Silver Slugger awards in 2019 – no other club had more than 2 awards o NL Rookie of the Ye
Slide 43: The stadium and The Battery Atlanta drove 21% revenue growth
The stadium and The Battery Atlanta drove 21% revenue growth 2016 Turner Field 2017 SunTrust Park 2018 SunTrust Park 2019 SunTrust Park Inaugural Season Season 2 Season 3 - forecast 9
Slide 44: Future opportunities
Future opportunities ▪ 2021 MLB All Star Game ▪ The Battery Atlanta additions ▪ Legalized Mobile Sports Wagering in Georgia 10
Slide 45: The Atlanta Braves exceeding expectations
The Atlanta Braves exceeding expectations ▪ The Braves have executed against their long-term strategy ▪ Continuous focus on driving operational improvements that enhance financial results ▪ Strong success on the field and in The Battery Atlanta translating to strong financial performance ▪ We believ
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Slide 47: Adjusted OIBDA Reconciliation to GAAP Operating Income
APPENDIX Adjusted OIBDA Reconciliation to GAAP Operating Income YTD YTD 9/30/2019 9/30/2018 Adjusted OIBDA $ 77 $ 105 Stock-based Compensation (11) (8) Depreciation/Amortization (54) (63) Operating Income $ 12 $ 34 13
Slide 48: 2019 Financial Results
2019 Financial Results Adjusted OIBDA ($M) Nine Months Nine Months Pro-forma Ended Ended Excluding 9/30/2019 9/30/2018 Residential (3) Baseball Revenue $ 415 $ 382 $ 382 Development Revenue 27 28 22 Total Revenue 442 410 404 Baseball Expenses 355 292 292 Development Expenses 10 13 8 Total Expenses 3
Slide 49: Braves Development Co. – Net Operating Income
APPENDIX Braves Development Co. – Net Operating Income Current Sept 2019 YTD % of Revenue Stabilized NOI % of Revenue Occupancy % NOI Office 100% $ 8.3 79% $ 11.4 86% Retail 94% $ 4.6 57% $ 6.4 53% Entertainment 100% $ 1.5 73% $ 2.2 82% Total Consolidated Assets $ 14.4 $ 20.0 Hotel $ 8.2 39% $ 10.9
Slide 50: Net Operating Income Reconciliation to GAAP Operating Income
APPENDIX Net Operating Income Reconciliation to GAAP Operating Income YTD 9/30/2019 Net Operating Income-Development (1) $ 14 Parking/Other 4 Ownership expenses (1) Stock-based Compensation (2) (1) Depreciation/Amortization (10) Operating Income - Development $ 7 NOTES: (1) See NOI on Slide 15 (2) S