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Liberty Media Corporation Reports Fourth Quarter and Year End 2021 Financial Results

·19 min read

ENGLEWOOD, Colo., February 25, 2022--(BUSINESS WIRE)--Liberty Media Corporation ("Liberty Media" or "Liberty") (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported fourth quarter and year end 2021 results. Headlines include (1):

  • Attributed to Liberty SiriusXM Group

    • SiriusXM reported strong full year 2021 results

      • SiriusXM's 2021 revenue reached a record $8.70 billion; an increase of 8% compared to 2020

      • Full-year 2021 net income climbed to $1.31 billion; diluted EPS of $0.32

      • Record full-year 2021 adjusted EBITDA(2) of $2.77 billion, an increase of 8% year-over-year

      • SiriusXM exceeded all 2021 financial & operating guidance; issued new 2022 guidance on February 1st

      • SiriusXM announced a special dividend of $0.25 per share, returning an additional $1 billion to stockholders

        • Estimated proceeds to Liberty of approximately $770 million, net of distributions to exchangeable bondholders

    • Liberty Media’s ownership of SiriusXM was 81.2% as of January 28, 2022

    • From November 1, 2021 through January 31, 2022, Liberty repurchased 3.8 million LSXMA/K shares at an average price per share of $49.57 for total cash consideration of $189 million

    • Settled exchanges of the 2.25% Live Nation exchangeable debentures on January 21, 2022 for total consideration of $664 million

  • Attributed to Formula One Group

    • F1 successfully completed record 22 race calendar in 2021

      • Planning for a new record 23 race calendar in 2022, beginning in Bahrain on March 20th

    • Audience figures grew across TV and digital platforms

      • Cumulative TV viewers up 4% to 1.55 billion; average TV viewers per race was 70.3 million

        • Cumulative viewership in US up 58%

      • Social media followers up 40% to 49 million with 1.5 billion aggregate social engagements

    • Announced multiple renewals with race promoter partners, including China, Singapore, Abu Dhabi, Spain, Bahrain and the United States

    • From November 1, 2021 through January 31, 2022, Liberty effectively repurchased 2.2 million FWONA/K shares at an average price per share of $58.59

      • Repurchased 472 thousand FWONA shares

      • Repurchased $64 million face value of 1% FWONK cash convertible notes due 2023, effectively retiring 1.7 million underlying FWONK shares

  • Attributed to Braves Group

    • Completed sale of minor league teams in January 2022; teams remain affiliates of Braves for future player development

    • Battery development generated strong $8 million of operating income and $21 million of net operating income ("NOI")(2) in 2021

"It was a strong end to 2021 for the Liberty companies. The finish to the Formula 1 World Championship could not have been more suspenseful. The compelling action on the track continues to power the business’s flywheel and we recently made numerous announcements around value-creating agreements. SiriusXM hit record revenue and adjusted EBITDA levels and announced a $1 billion special dividend. The Atlanta Braves are still basking in the glory of their World Series title. Live Nation benefited from incredible fan demand in the back half of the year and all leading indicators point to record performance in 2022," said Greg Maffei, Liberty Media President and CEO. "We enter this year energized and excited for the next areas of growth across the board."

Discussion of Results

Unless otherwise noted, the following discussion compares financial information for the three months or year ended December 31, 2021 to the same period in 2020.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the fourth quarter and full year 2021. Approximately $8 million and $28 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group in the fourth quarter and full year 2021, respectively.

Three months ended

Twelve months ended

December 31,

December 31,

2020

2021

2020

2021

amounts in millions

amounts in millions

Liberty SiriusXM Group

Revenue

Sirius XM Holdings

$

2,189

$

2,281

$

8,040

$

8,696

Total Liberty SiriusXM Group

$

2,189

$

2,281

$

8,040

$

8,696

Operating Income (Loss)

Sirius XM Holdings(a)

(520

)

458

790

1,945

Corporate and other

(7

)

(8

)

(41

)

(28

)

Total Liberty SiriusXM Group

$

(527

)

$

450

$

749

$

1,917

Adjusted OIBDA

Sirius XM Holdings

660

669

2,575

2,770

Corporate and other

(5

)

(3

)

(31

)

(15

)

Total Liberty SiriusXM Group

$

655

$

666

$

2,544

$

2,755

__________________________

(a)

Fourth quarter and full year 2020 was impacted by a $976 million non-cash impairment charge associated with Pandora.

SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the Securities and Exchange Commission. SiriusXM reported its stand-alone fourth quarter and full year results on February 1, 2022. For additional detail on SiriusXM’s financial results, please see SiriusXM’s earnings release posted to its Investor Relations website. For presentation purposes on page one of this release, we include the results of SiriusXM, as reported by SiriusXM, without regard to the purchase accounting adjustments applied by us for purposes of our financial statements. Liberty Media believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results is best understood in the context of SiriusXM's historical financial presentation.

The businesses and assets attributed to Liberty SiriusXM Group consist primarily of Liberty Media’s interests in SiriusXM, which includes its subsidiary Pandora, and Live Nation.

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the fourth quarter and full year 2021. Approximately $16 million and $40 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Formula One Group in the fourth quarter and full year 2021, respectively.

"2021 was a remarkable year for Formula 1 in all respects. The racing was spectacular and the business produced outstanding results," said Stefano Domenicali, Formula 1 President and CEO. "We continue to build off this strong foundation and look forward to our record setting 23-race calendar for 2022 with new cars, regulations, races and drivers."

Three months ended

Twelve months ended

December 31,

December 31,

2020

2021

2020

2021

amounts in millions

amounts in millions

Formula One Group

Revenue

Formula 1

$

485

$

787

$

1,145

$

2,136

Total Formula One Group

$

485

$

787

$

1,145

$

2,136

Operating Income (Loss)

Formula 1

$

(23

)

$

81

$

(386

)

$

92

Corporate and other

(18

)

(19

)

(58

)

(52

)

Total Formula One Group

$

(41

)

$

62

$

(444

)

$

40

Adjusted OIBDA

Formula 1

$

90

$

183

$

56

$

495

Corporate and other

(12

)

(15

)

(38

)

(29

)

Total Formula One Group

$

78

$

168

$

18

$

466

The following table provides the operating results of Formula 1 ("F1").

F1 Operating Results

Three months ended

Twelve months ended

December 31,

December 31,

2020

2021

2020

2021

(unaudited)

(unaudited)

amounts in USD millions

amounts in USD millions

Primary Formula 1 revenue

$

439

$

615

$

1,029

$

1,850

Other Formula 1 revenue

46

172

116

286

Total Formula 1 revenue

$

485

$

787

$

1,145

$

2,136

Operating expenses (excluding stock-based compensation included below):

Team payments

(270

)

(378

)

(711

)

(1,068

)

Other cost of Formula 1 revenue

(94

)

(180

)

(263

)

(421

)

Cost of Formula 1 revenue

$

(364

)

$

(558

)

$

(974

)

$

(1,489

)

Selling, general and administrative expenses

(31

)

(46

)

(115

)

(152

)

Adjusted OIBDA

$

90

$

183

$

56

$

495

Stock-based compensation

(2

)

(5

)

(13

)

(17

)

Depreciation and Amortization

(111

)

(97

)

(429

)

(386

)

Operating income (loss)

$

(23

)

81

$

(386

)

92

Number of races in period

7

7

17

22

Primary F1 revenue represents the majority of F1’s revenue and is derived from (i) race promotion revenue, (ii) media rights fees (formerly referred to as broadcasting fees) and (iii) sponsorship fees. For the year ended December 31, 2021, these revenue streams comprised 31%, 40% and 16%, respectively, of total F1 revenue.

Beginning January 1, 2021, F1 began reclassifying certain components previously reported in Other F1 revenue into Primary F1 revenue to better align with the way it currently evaluates the business. In addition, broadcasting revenue was renamed media rights revenue. The more significant components that were reclassified into Primary F1 revenue include fees for F1 TV subscriptions, fees for licensing commercial rights for Formula 2 and Formula 3 races, fees for the origination and support of program footage, fees for broadcast rights for Formula 2 and Formula 3 races and fees for advertising rights on Formula 1’s digital platforms. Following the reclassification, Other F1 revenue is primarily comprised of freight and hospitality revenue. There was $24 million and $65 million of Other F1 revenue reclassified as Primary F1 revenue for the three and twelve months ended December 31, 2020, respectively, to conform to the current period presentation. The impact of the revenue reclassification for the years ended December 31, 2019 and 2020 can be found in Schedule 4 of this press release.

There were 7 and 22 races held in the fourth quarter and full year 2021, respectively, compared to 7 and 17 races held in the fourth quarter and full year 2020 due to the compact schedule driven by the COVID-19 pandemic. Fan attendance continued to be assessed by relevant government authorities on a race-by-race basis throughout the year, with restrictions easing as the year progressed and significantly higher fan attendance beginning in the third quarter of 2021 compared to the prior year. The Paddock Club operated at only one event in 2020, and even then with strictly limited capacity, and resumed more normal operations in July 2021, operating at 6 races in the third quarter and 5 in the fourth quarter.

Primary F1 revenue grew in the fourth quarter, primarily driven by increased race promotion revenue compared to the prior year where limitations on fan attendance led to one-time changes in the contractual terms of races held. Media rights revenue was flat in the fourth quarter as contractual increases and growth in F1 TV subscription revenue were offset by the impact of lower proportionate recognition of season-based income in 2021 (7/22 races took place in the fourth quarter of 2021 compared to 7/17 in the fourth quarter of 2020). Sponsorship revenue increased in the fourth quarter driven by revenue from new sponsors in the current year and pandemic-related reductions to sponsorship revenue recognized in the prior year, where F1 honored one-time changes in certain sponsorship contracts due to the cancellation of races that had specific sponsorship-related inventory.

Primary F1 revenue grew for the full year with increases across all primary revenue streams. Race promotion revenue grew due to five more events held in 2021, including more non-European races, some of which saw the return of capacity crowds, whereas limitations on fan attendance in the prior year led to one-time changes in the contractual terms of races held. Race promotion revenue for the full year also benefited from a one-time settlement recognized in the first quarter related to the cancellation of a race originally scheduled to commence in 2020. Media rights revenue increased for the full year driven by higher broadcasting fees due to improved terms in certain new and renewed broadcasting agreements, other contractual rate increases, strong growth in F1 TV subscription revenue and the effect on the prior year of one-time changes in contract fees resulting from the pandemic and associated calendar disruptions. Sponsorship revenue increased due to revenue from new sponsors and the impact of more races held as well as pandemic-related reductions to sponsorship revenue recognized in the prior year.

Other F1 revenue increased in the fourth quarter and full year driven by hospitality revenue generated from the return of the Paddock Club, higher licensing revenue from new contracts and growth in gaming and merchandising royalties, as well as higher freight and travel income with more races held outside Europe compared to the prior year. Other F1 revenue for the full year also benefited from the additional races held.

Operating income and adjusted OIBDA grew in the fourth quarter and full year 2021. Team payments increased in both periods driven by the growth in Primary F1 revenue and the associated impact on the calculation of the team payments, which are 100% variable under the 2021 Concorde Agreement. Team payments in 2020 included one-time fees paid to teams upon signing the 2021 Concorde Agreement and certain fixed and minimum guaranteed payments to teams under the previous agreement.

Other cost of F1 revenue is largely variable in nature and mostly relates to revenue opportunities. These costs increased in the fourth quarter and full year due to costs associated with the operation of the Paddock Club and higher technical, freight and logistics, digital media and other related costs driven by five more races in the full year and the logistic costs of more non-European races. Selling, general and administrative expense increased in the fourth quarter and full year primarily due to higher personnel costs, discretionary marketing expenses and professional fees.

The Liberty SiriusXM Group holds an approximate 2.2% intergroup interest (5.3 million notional shares) in the Formula One Group as of January 31, 2022. These shares are not included in the outstanding share count of Formula One Group in Liberty Media’s most recent Form 10-K. Assuming the issuance of the shares underlying this intergroup interest, the Formula One Group outstanding share count as of January 31, 2022 would have been 237 million.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Liberty Media Acquisition Corporation, other minority investments and an inter-group interest in the Braves Group.

BRAVES GROUP - The following table provides the financial results attributed to the Braves Group for the fourth quarter and full year 2021. Approximately $2 million and $11 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group in the fourth quarter and full year 2021, respectively.

Three months ended

Twelve months ended

December 31,

December 31,

2020

2021

2020

2021

amounts in millions

amounts in millions

Braves Group

Revenue

Corporate and other

$

35

$

102

$

178

$

568

Total Braves Group

$

35

$

102

$

178

$

568

Operating Income (Loss)

Corporate and other

(35

)

(1

)

(128

)

20

Total Braves Group

$

(35

)

$

(1

)

$

(128

)

$

20

Adjusted OIBDA

Corporate and other

(4

)

18

(53

)

104

Total Braves Group

$

(4

)

$

18

$

(53

)

$

104

The following table provides the operating results of Braves Holdings, LLC ("Braves").

Braves Operating Results

Three months ended

Twelve months ended

December 31,

December 31,

2020

2021

2020

2021

amounts in millions

amounts in millions

Baseball revenue

$

23

$

93

$

142

$

526

Development revenue

12

9

36

42

Total revenue

$

35

$

102

$

178

$

568

Operating expenses (excluding stock-based compensation included below):

Other operating expenses

(27

)

(62

)

(170

)

(377

)

Selling, general and administrative expenses

(12

)

(21

)

(57

)

(80

)

Adjusted OIBDA

$

(4

)

$

19

$

(49

)

$

111

Stock-based compensation

(14

)

(2

)

(3

)

(8

)

Depreciation and Amortization

(15

)

(16

)

(69

)

(72

)

Operating income (loss)

$

(33

)

$

1

$

(121

)

$

31

Regular season home games in period

3

30

79

Postseason home games in period

6

8

7

8

Baseball revenue per home game

$

3.8

$

8.5

$

3.8

$

6.0

Baseball revenue is comprised of (i) ballpark operations (ticket sales, concessions, corporate sales, retail, suites, premium seat fees and postseason), (ii) local broadcast rights and (iii) shared Major League Baseball revenue streams, including national broadcast rights and licensing. Development revenue is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.

There were 11 and 87 home games (including postseason) played in the fourth quarter and full year 2021, respectively, compared to 6 and 37 home games played in the comparable prior year periods. The 2021 regular season began with fans in attendance at 33% capacity for the first home game beginning April 9th, which increased to 50% capacity beginning April 23rd and further expanded to 100% capacity beginning May 7th. There were no fans in attendance during the 2020 regular season.

Baseball revenue increased in the fourth quarter and full year as all primary sources of revenue grew driven by the increase in the number of regular and postseason home games played with significantly more fans in attendance and the Braves success in the 2021 postseason as World Series Champions. Development revenue decreased in the fourth quarter due to modified timing of revenue recognition surrounding various 2021 lease commencements. Development revenue for the full year increased due to rental income from various new lease commencements and a reduction in deferred payment arrangements.

Operating income and adjusted OIBDA increased in the fourth quarter and full year. Revenue growth more than offset increased operating costs as player salaries and facility and game day expenses returned to more normalized levels in 2021. Selling, general and administrative expense increased in the fourth quarter and full year primarily due to higher marketing expense and the absence of COVID-19 related cost reduction initiatives that impacted the 2020 season.

The Formula One Group holds an approximate 11.0% intergroup interest (6.8 million notional shares) and the Liberty SiriusXM Group holds an approximate 3.7% intergroup interest (2.3 million notional shares) in the Braves Group as of January 31, 2022. These shares are not included in the outstanding share count of the Braves Group in Liberty Media’s most recent Form 10-K. Assuming the issuance of the shares underlying these intergroup interests, the Braves Group outstanding share count as of January 31, 2022 would have been 62 million.

The businesses and assets attributed to the Braves Group consist primarily of Liberty Media’s subsidiary the Braves, which indirectly owns the Atlanta Braves Major League Baseball Club and certain assets and liabilities associated with the Braves’ ballpark and mixed-use development project.

Share Repurchases

From November 1, 2021 through January 31, 2022, Liberty SiriusXM Group repurchased approximately 2.9 million Series C Liberty SiriusXM shares (Nasdaq: LSXMK) at an average cost per share of $49.98 for total cash consideration of $146 million and repurchased approximately 879 thousand Series A Liberty SiriusXM shares (Nasdaq: LSXMA) at an average cost per share of $48.22 for total cash consideration of $42 million.

From November 1, 2021 through January 31, 2022, Formula One Group repurchased approximately 472 thousand Series A Liberty Formula One shares (Nasdaq: FWONA) at an average cost per share of $56.10 for total cash consideration of $26 million.

The total remaining repurchase authorization for Liberty Media as of February 1, 2022 is approximately $406 million and can be applied to repurchases of Series A and Series C shares of any of the Liberty Media Corporation tracking stocks.

FOOTNOTES

1)

Liberty Media's President and CEO, Greg Maffei, will discuss these highlights and other matters in Liberty Media's earnings conference call which will begin at 10:00 a.m. (E.S.T.) on February 25, 2022. For information regarding how to access the call, please see "Important Notice" later in this document.

2)

For definitions of adjusted OIBDA (as defined by Liberty Media), adjusted EBITDA (as defined by SiriusXM) and net operating income (as defined by Braves) and applicable reconciliations, see the accompanying schedules.

NOTES

The following financial information with respect to Liberty Media's equity affiliates and available for sale securities is intended to supplement Liberty Media's consolidated balance sheet and statement of operations to be included in its Form 10-K for the year ended December 31, 2021.

Fair Value of Corporate Public Holdings

(amounts in millions)

9/30/2021

12/31/2021

Liberty SiriusXM Group

Live Nation Investment(a)

$

6,347

$

8,336

iHeart(b)

149

Public Holdings(c)

50

50

Total Liberty SiriusXM Group

$

6,546

$

8,386

Formula One Group

Public Holdings(c)

194

167

Total Formula One Group

$

194

$

167

Braves Group

N/A

N/A

Total Liberty Media

$

6,740

$

8,553

__________________________

(a)

Represents the fair value of the equity investment in Live Nation. In accordance with GAAP, Liberty Media accounts for its investment in the equity of Live Nation using the equity method of accounting and includes it in its condensed consolidated balance sheet at $149 million and $89 million as of September 30, 2021 and December 31, 2021, respectively.

(b)

Includes fair value of iHeart shares which were included in other long-term assets. Liberty Media sold 1.0 million shares of iHeart during the third quarter and its remaining 6.0 million shares in the fourth quarter of 2021.

(c)

Represents the carrying value of other public holdings that are accounted for at fair value. Excludes intergroup interests.

Fair Value of Intergroup Assets and Liabilities

The intergroup interests represent quasi-equity interests which are not represented by outstanding shares of common stock; rather, the Formula One Group and Liberty SiriusXM Group have attributed interests in the Braves Group, which are generally stated in terms of a number of shares of Liberty Braves common stock, and the Liberty SiriusXM Group also has an attributed interest in the Formula One Group, which is generally stated in terms of a number of shares of Liberty Formula One common stock. Each reporting period, the notional shares representing the intergroup interests are marked to fair value. The changes in fair value are recorded in the unrealized gain (loss) on the intergroup interest line item in the unaudited attributed consolidated statements of operations. The intergroup interests will remain outstanding until the redemption of the outstanding interests, at the discretion of Liberty Media’s Board of Directors, through transfer of securities, cash and/or other assets from the Braves Group or Formula One Group, respectively, to the respective tracking stock group.

Attributed

as of December 31, 2021

Liberty

Formula

SiriusXM

Braves

One

Group

Group

Group

(amounts in millions)

Notional Shares

Value

Notional Shares

Value

Notional Shares

Value

Braves Group intergroup interests

2.3

$

66

(9.1

)

$

(257

)

6.8

$

191

Formula One Group intergroup interest

5.3

$

313

(5.3

)

$

(313

)

Cash and Debt

The following presentation is provided to separately identify cash and liquid investments and debt information.

(amounts in millions)

9/30/2021

12/31/2021

Liberty SiriusXM Group(a)

$

529

$

598

Formula One Group(b)

2,195

2,074

Braves Group(c)

134

142

Total Consolidated Cash and Cash Equivalents (GAAP)

$

2,858

$