10-QPeriod: Q2 FY2020

Liberty Media Corp Quarterly Report for Q2 Ended Jun 30, 2020

Filed August 10, 2020For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) reported its second-quarter 2020 results, ending June 30, 2020. The company experienced a significant revenue decline, primarily due to the impact of COVID-19 on its Formula 1 and Braves Holdings segments. Formula 1 revenue was severely affected by the cancellation and postponement of races, while the Braves Holdings segment saw reduced baseball and development revenue. Despite these challenges, Sirius XM Holdings, the company's largest segment, demonstrated resilience with stable subscriber revenue, though advertising revenue saw a decline. Overall, Liberty Media reported a net loss for the quarter, largely attributable to the performance of its Formula 1 and Braves segments and the unrealized losses on financial instruments. The company's liquidity position remained strong, supported by substantial cash and cash equivalents and available credit facilities. Management is actively managing expenses and evaluating strategic options in light of the ongoing pandemic and its impact on business operations.

Financial Highlights

42 data points
Beta

Revenue

$1.91B

Net Income

-$326.00M

-17.1% Net Margin

Total Assets

$46.21B

Cash & Equivalents

$4.00B

Free Cash Flow

$312.00M

Financial Statements
Beta
Revenue$1.91B
SG&A Expenses$390.00M
Operating Expenses$1.70B
Operating Income$214.00M
Interest Expense$163.00M
Net Income-$326.00M

Key Highlights

  • 1Consolidated revenue decreased significantly in Q2 2020 compared to the prior year, primarily driven by the impact of COVID-19 on Formula 1 and Braves Holdings.
  • 2Formula 1 revenue saw a substantial decline due to the cancellation and postponement of races, impacting race promotion, broadcasting, and sponsorship fees.
  • 3Braves Holdings experienced reduced revenue from both baseball operations (due to a shortened season and fan attendance uncertainty) and development projects.
  • 4Sirius XM Holdings, the largest operating segment, showed stable subscriber revenue, although advertising revenue declined due to reduced ad spend linked to the pandemic.
  • 5The company reported a net loss attributable to Liberty stockholders of $(326) million for the quarter, influenced by the operating performance of its segments and financial instrument fluctuations.
  • 6Liberty Media maintained a strong liquidity position with significant cash and cash equivalents of $3,999 million as of June 30, 2020, and substantial availability under its margin loans.
  • 7The company underwent a significant reattribution of assets and liabilities between the Formula One Group and the Liberty SiriusXM Group in April 2020, impacting segment reporting.

Frequently Asked Questions

The primary driver of the revenue decrease was the significant negative impact of the COVID-19 pandemic on Liberty Media's Formula 1 and Braves Holdings segments. Formula 1 experienced cancellations and postponements of its race calendar, leading to a substantial drop in revenue from race promotion, broadcasting, and sponsorship. The Braves Holdings segment also saw reduced revenue due to the shortened baseball season, uncertainty around fan attendance, and delays in development projects.

Sirius XM Holdings demonstrated resilience, with subscriber revenue remaining stable. However, advertising revenue experienced a decline, reflecting reduced advertising spend across industries due to the economic impact of the pandemic. Despite this, Sirius XM Holdings remains a key contributor to Liberty Media's overall financial performance.

Liberty Media maintained a strong liquidity position as of June 30, 2020, with $3,999 million in cash and cash equivalents. The company also has access to available credit facilities and margin loans. While acknowledging the ongoing impact of COVID-19 on its operating businesses, management believes its liquidity sources are sufficient to cover projected future uses of cash.

In April 2020, Liberty Media's board approved a reattribution of assets and liabilities between the Formula One Group and the Liberty SiriusXM Group. This involved reattributing Live Nation stake, convertible notes, and associated hedging instruments to the Liberty SiriusXM Group, while liabilities like convertible notes and a margin loan were also transferred. This reattribution was aimed at optimizing the structure and financial exposure across the tracking stock groups and is reflected prospectively in the financial statements.