Okay, great. Let's get started with our next session. Thank you, everyone, for taking the time to join us today. My name is Stephen Lasnik, and I'm the firm's Lead Entertainment Analyst. We're excited to welcome to the Communacopia & Technology Conference this year, Derek Chang, the CEO of Liberty Media. Derek, thank you for being with us today. Thanks for having me. Amazing. Derek, it's been a big year for you and Liberty Media. You've taken over as CEO. You've closed the acquisition of MotoGP. You've worked with Apple to promote the F1 movie, which has been highly successful. Maybe just to start, as you settled into your role, what would you say have been your top priorities over the last six or so months? Looking out over the next year, what are your top priorities for both Formula One and MotoGP as you grow those properties? Also, to have Liberty Media more holistically with Liberty Live. Yeah, now, again, thanks for having me, and thanks to everyone for showing up today. I think for us, the first six months or so of my tenure, really about sort of executing a lot of what we talked about late last year, which was, you know, closing MotoGP. I think, you know, not Liberty Media per say, but on the Liberty Broadband side, you know, spinning out GCI and, you know, getting much further along in terms of the deal with Charter and Cox for those group of assets. Then to pursue the Liberty Live bid, which we've started down that path with the filing of RS4, which I think we did at the end of July, to hope to be effective at the end of this year, our fourth quarter of this year, SEC sort of dependent. I think as we're looking forward right now, the biggest priorities are probably more operational in nature, as they relate to MotoGP, just having sort of closed and not really having been able to interact with those guys during the regulatory process, getting fully up to speed, understanding sort of their challenges, their opportunities, both in the near term, really in the near term, excuse me, because as we've sort of thought about the thesis for MotoGP, we've obviously been well aware of what we wanted to do with it, which, for those of you guys who don't follow MotoGP, it's a really, really fast-paced, dangerous, dynamic sport. I think the team there has done a tremendous job of building what that is, what that sport is, what that IP really represents. I think where the opportunity there is, is sort of the further commercialization of it. I think that, you know, the fan base is discreet. It is passionate beyond belief how we expand that fan base, how we expand the concept to make it more of an entertainment asset. It's probably what we're looking at over the next several years and what that can entail. Maybe digging into that on the MotoGP side, expanding the fan base, and as you think about the strategic pillars of growing the sport over the next couple of years, what are some of the things you're really focused on? Where's the white space that you feel like Liberty Media and Formula One could perhaps come in and help with? What's the next 12 months look like? As you think maybe more broadly, more holistically, the next three to five years look like? Yeah, I think it's what I just said in terms of the broader commercialization and sort of monetization. I think that happens over multiple fronts. We think about the three pillars of the revenue, both at Formula One and MotoGP. You think about the local promoters, the races, the at-track experience. We think about the media rights. We think about sponsorship. If we break all that down, in the near term, what we're focused on is, hey, how do we actually build a team at MotoGP, have the right skill sets, and the right people in place who have done this and can then apply that to what I just talked about. That process started even before we walked in the door, and it's continuing to bring that level of experience and sophistication to MotoGP. I think in the nearer term, you'll probably see us start to, and because this has already been in progress, to be fair, but the local promoters and what we can do at the races in terms of hospitality. Quint is another company that we own at Liberty, and I think bringing their experience there and what we've done at Formula One, and really enhancing what that means. You go to a Formula One race and go to a MotoGP race, it's a different experience right now. It doesn't mean it should be the same experience. It just should be a quality experience. It's a different demographic, and we have to recognize that. I think there's that on the hospitality side, and then a little bit longer term, stepping up the financial impact from our local promoters and the deals that we strike. I think where we put these races is a big factor. We have races around the world, but I think we could have greater geographic diversification. We just announced recently that we're going back to Brazil next year. We've got a race in Buenos Aires coming in 2027. We have three races in Southeast Asia. There is more opportunity. Some of these races, to be fair, are not necessarily in ideal locations from an accessibility standpoint. They may be good tracks, which is awesome. If we're bringing people in, and having people come to races, having the all-around hospitality and accessibility, being near a major metropolitan area, having access to the hotels, the restaurants, or whatever it is that makes the whole experience that much better. I think on sponsorship, it will be probably a similar sort of opportunity that we've seen at Formula One, which is we've got a pretty strong base of endemic sponsors right now. To be fair to the current team, it's not as if they've been necessarily driving that area to expand beyond that. I think everyone sees that opportunity. I think it's tied to how we develop the sport. Can we go past the core demographic and expand, expand our reach, expand our fan base, and that in itself will then bring in, expand what the brand means in terms of what the entertainment value is. That itself will start to draw in sponsors. I think that's an opportunity probably to do it. It will take a while to do this, and it's a bit of a virtuous cycle. I think we have some advantage in having done this at Formula One. I think there's credibility attached to the Liberty name, and the Liberty ownership of MotoGP. You have the opportunity to get in front of sponsors of a story, and frankly, have a case study to present that can demonstrate to them what the value is going to be. Maybe just following up on a few of the points that you made across race promotion, sponsorship, and then media rights, which I wanted to discuss as well. On the race calendar, you mentioned geographic diversification. Where do you see the sport going over the next couple of years in terms of the geographic mix? How fast can you move with the existing rights agreements that you have in place today? I'd be curious your thoughts on growing the race calendar, perhaps adding more races to bring it up to a level that we see at Formula One. Yeah, so I think, you know, with any sort of race calendar shift, you need some lead time if you're going to move a race. You have to say, hey, there's got to be a track there, and if there isn't, then you're going to have to build one. There's a lot of prep that goes into that. I think the reality is we probably have a handful of races at any given time that are going to come up in the nearer term. Those are always sort of available to sit there and make that strategic decision as to where they might go or whether they stay where they are, and you talk to your partners, your local partners, about enhancing what that experience is. We already are in, you know, a lot of great places, and that can continue. I think what we are trying to do, which will benefit the local promoters too, is if Liberty's investing in the sport, they too can invest in the sport. The parallel to Formula One is, as we're going through a lot of the next cycle and Formula One renewals and stuff, is sort of what we're seeing people do at the track. In Budapest, not to go off topic, but it's all related anyway. What we saw in Budapest is they just finished their upgrade this summer, and so the race this year, you have the standard of the paddock and all of that is at a much higher standard now. They've increased the capacity, all that sort of stuff that enhances our ability to monetize it, also enhances the race experience for people coming to the race. I think that sort of parallel can run through the system at MotoGP. I think you have a better, you're at a lower base, so the opportunity itself is greater there. I think, you know, geographically, we're still pretty heavily concentrated in Europe, and Europe has been great. Southern Europe has been great for MotoGP. It really embodies what it's all about. That being said, are there opportunities to diversify a bit and sort of spread our wings? I think there are, and I think that, you know, we'll be contemplating that here as we go forward. On sponsorship, similar question in the sense of broadening out the sponsorship base from the endemic sponsors that MotoGP has today to something a little bit more diversified in terms of category. It took Formula One the better part of the last seven, eight years to get to the point that it's at today. Do you see a similar timeline for MotoGP to get there, or are there categories and relationships perhaps that you could leverage across the two properties to make a little bit more headway there a little bit sooner? Look, who knows? Right now, I would say that broadly speaking, it's going to take some time because, A, you've got to actually build the brand or have enough credibility to walk into a sponsor and say, this is what the brand embodies, this is what we are all about. If you don't quite have that, how are we going to get there? They've got to buy into that and say, hey, I want to associate with that. I think what the acceleration could happen vis-à-vis Formula One is having done this at Formula One, having a lot of relationships out there. Are there people who see this as a complement to what they're already doing with F1? That could possibly accelerate some of that. The reality is in some of these places, and sponsors are no different, I think people see where some of the early movers go, and you have some pretty fast followers. I think that could happen here too. That's probably a long analogy, but the dam break, you can see, you can see where that happens. It's up to us, frankly, to invest and build the brand. That's what we are jumping in full force to do. MotoGP media rights, mostly concentrated among Spain and Italy at the moment. We'd just be curious to get your take on perhaps the sports media rights market more broadly in Europe and globally, and how you see MotoGP fitting into that. Over the medium term, as you think about renegotiating media rights deals, what are you looking for in terms of a partner, reach, monetization, maybe integration of digital video paths, et cetera? I think that MotoGP is in a great spot because, as I said earlier, you're not building a new sport. You have this passionate fan base, and in certain countries, that's very meaningful. You know which countries those are because those are the biggest deals that we have, probably. At the same time, being able to leverage off of that, and as I said earlier, expand what the brand means and bring in new fans, that goes part and parcel with the distribution you have. I think that's an easier sell than a brand new sports league coming along. At the same time, we're not so big and so established from a financial standpoint that you've got a target on your back in terms of people sitting there going, I got to cut my costs, I'm going to cut this. You're actually at a phase where you're hopefully in a bit of our own sweet spot. I mean, yeah, you'd like to be the NFL and command whatever the NFL commands, but absent that, where we fit and being able to leverage off the brand and the fan base that we already have have taken years and years and years to build, but also not being prohibitively expensive in any one market. I'd like to see us be able to take that and tell that story to media partners, sponsor partners globally, and have them understand what we can do for them as a sport. On the cost and organizational side of MotoGP, and back when you acquired Formula One, there was this investment period for a number of years to get the organization up to a level that it could start spinning this flywheel. It seems like we're a little bit further along on the MotoGP side today than where we were at the onset of Liberty acquiring Formula One. I'm just curious from your position today, where do you see the opportunity to invest in the organizational structure, and then the associated impact on the cost structure? How should investors be thinking about that? Yeah, so at Formula One, it's funny because I think I told this story earlier today, like, you know, Chase, Chase Carey, who I used to work for, who hired me at DirecTV, obviously ran Formula One for Liberty at the very beginning and now sits on the Liberty board. You know, Chase and I spent a fair amount of time together, and there are moments that I get the whole history lesson from Chase as to what Formula One was like when we entered. There's a lot there. You're right. I think we're in a different phase than what he had to deal with when he took that over. I think that we are light in terms of some of the sort of expertise that we have, really on the commercialization front. It's not sort of leaps and bounds of what you need to do to invest. It's hiring several good people who know what they're doing, who have done this, who have built global brands, and sold global brands. It's that sort of infrastructure that we're looking for as we sort of move forward. They've already started the process before we closed, and we're continuing that process. It does take some lead time to find the right people. It takes some lead time to enmesh them in the culture and have people working together. It's not like we're talking years. This is all pretty quick. On the magnitude of investment that you think is needed to get to that point, should investors think about that similarly to the magnitude of investment made at Formula One? No, I think there's incremental increase, but I don't think it's anything that even that noticeable. No, that's helpful. Team payments, similar to Formula One, MotoGP's largest expense is team payments, but dissimilar to Formula One, the payments are more fixed in nature. Can you maybe talk a little bit more about the team payment structure, how those costs are calculated year in and year out, and then just maybe more broadly the nature of the relationships with the teams and the agreement that's in place with the team principals and team owners? Yeah, I think I'll start there. I mean, everyone probably knows the F1 story and sort of the relationships between F1 and the teams in the early days of Liberty's ownership. I mean, that was a pretty tough set of relationships. I think over the last 10 years, we've done a remarkable job in terms of, as a sport, not just Liberty or not just F1, but F1 and the teams have done a great job in coming together and realizing that, you know, together we're much more powerful than sort of disparate factions always fighting over the wrong stuff. I think at Moto we have a huge advantage in that the teams and, you know, the guys at MotoGP have good relationships already. This has been going on for years, so you don't have to sort of rebuild that or create this element of trust that didn't exist. I think that does exist. Now it's about explaining to the teams with Liberty's involvement how we can bring some of the same forces to bear that we did at Formula One and really broaden the appeal of the sport and, you know, make their investments sort of worth much more than they are today, hopefully. I think that, as evidenced almost by the announcement on Friday with Günther Steiner coming into the sport and seeing that opportunity and seeing what he believes is probably the upside, his investors believe is the upside in having Liberty involved and sort of following on what we did with Formula One. In terms of the structure of our arrangement with the teams, it is a bit different than at Formula One in that it's sort of a more fixed nature to it and multiple components in terms of payments to the teams on somewhat of a fixed basis. There's additional compensation as it relates to certain types of races that have more expense, the flyaway races. There is a component of it where we actually cover costs on a lot of the transport and things like that. Once those are covered and the teams themselves don't have huge expenses. This isn't Formula One. These are sort of tens of millions of dollars, not hundreds. I think that from a model standpoint for both the teams and for us, once we can really start to drive incremental monetization and revenue, you can see a lot of that start to come to the bottom line, hopefully. More operating leverage at MotoGP. Maybe switching gears over to Formula One, I'll start with the U.S. media rights since that's been the topic of discussion for the better part of the summer. Perhaps you could update us on the status of the U.S. media rights negotiation, where we are in that process and what characteristics you're looking for as we look into the next year, signing a deal before the next season kicks off. Yeah, look, I think it's been pretty well documented in terms of the negotiations. We are pretty far along and we're pretty happy and comfortable with sort of where we're going to end up. Hopefully we'll have something to talk about relatively soon. The more substantive question is sort of what we are looking for and what we've been looking for. I think it's a good time to talk about sort of the media landscape and not to go do a history lesson, but as everyone knows, in the past it was like, okay, you do a deal with a media partner and it's like, okay, there's many games or there's many events that you got and the events are two hours or an hour and a half and that's the focus and that's what you're selling. Now it's much more, and this isn't just Formula One, but I think across the board, hey, how is your media partner, hey, is your media partner even just a media partner? Are they also a sponsor? Do they have other ways that they're going to monetize and commercialize sort of the relationship? On the flip side, how are they helping you sort of do that same thing? In the U.S., we've been on a pretty nice growth path with Austin and then Miami and now Vegas, which we're very proud of and very happy with sort of how that's going. I think bringing in a partner who amplifies a lot of that for us on an overall holistic basis and driving that engagement with fans is what's important. Again, we, as I said earlier, are looking forward to successful conclusions of this process here relatively soon. Maybe more holistically on the media rights discussion, thinking internationally for Formula One. Just curious as you look out over the next couple of years where you see the most opportunity globally to either enhance maybe the quality of your media rights partner, maybe some of these ancillary benefits that it seems like you're looking for in the U.S. or monetization, or is there a world where you can get all three of those components working together in some markets in a better way than what they are today? Yeah, I think it's, you know, we are a healthy property, and I think a sought-after property as you know, we have these discussions around the world. I think we announced that we're doing something with Globo, being back on Globo in Brazil next year. We announced earlier this year that we had renewed our rights in Canada. I think we've got discussions ongoing in several of the major markets that we will have clarity to here relatively soon. Much like I just talked about the U.S., I think this is a holistic sort of view of your, you know, traditionally what's been known as your media partner, but I don't know if it's necessarily a media partner per se in a classic sense of someone who's just broadcasting your race. It is someone who can help fans access your content beyond the race. It is someone who can help your fans interact with even your sponsors. It's all of that. I think the guys that are looking forward and sort of view that as part of their own playbook and what we can do to enhance that for them are ones that we want to try to do business with. You're not going to, it's not a perfect world and timing is never perfect either. You have to sometimes deal with the practical implications of what's available and how to make that partner and what's available work for you. These discussions globally seem like they are very healthy. I think Stefano and his team are doing a great job. I think we'll continue to see the right partners line up with Formula One. On sponsorship, Formula One's been incredibly successful over the last several years, adding sponsors. We've seen LVMH, American Express, many others come into the sport. I think there's an investor narrative out there along the lines of the sponsorship opportunity being capped at a certain level, either them or global sponsors, maybe less opportunity on the official partner or track sponsor side with all the inventory that's come in. I'm curious to get your sense of where we are in that opportunity curve. Has the sponsorship opportunity tapped out at the current level that we're at, or are there more ways to create inventory or upsell sponsor on the Formula One side? Yeah, there's always an investor narrative that there's a finite period at which something's going to end, right? Understandably, as people do their risk assessments and all that sort of stuff. Look, I think that on the sponsor side, this has been an incredible year. Stefano and Emily have done a fantastic job and their teams in terms of really, on multiple fronts. One is the continuation of just bringing in new sponsors. Vegas has been a big part of that, and I think it's been very helpful to that story and to that narrative. I think as we are filling a lot of categories, there are still several, I think, that can be filled. I think, in as much, there's growth opportunity in terms of existing renewals that are going to happen here over the next several years. I think you can see the demand is there, the inventory is kind of tightened in some ways. What you will hopefully see is, even if the names don't change, which is actually a good thing because having long-term partners who continually have associated with you and continue to invest in that brand association is extraordinarily powerful. I think what you'll see is hopefully people coming in at different tiers where you drive demand and drive pricing, and that in itself will help the monetization, beyond the continued investment in that brand affiliation that these guys make. On race promotion, Formula One's negotiated or renegotiated several deals over the last couple of months. I think you've had Belgium, Monaco, the Netherlands, and Brazil all pretty recently. What does F1 look to achieve in some of these race deals, better monetization? You've spoken a lot about fan experience. Maybe just talk a little bit about what you've been able to maybe extract or negotiate given the limited supply of weekends on the calendar over at F1. As you look forward to opportunities ahead on the race promotion front, where the greatest opportunity lies for improved monetization. Yeah, I mean, clearly there's a financial component to it, which we're all well aware of. I think there's also a geographical component, which we've been clear about and sort of using races and where we put them as a way to grow the sport, expand the audience, expand where that fan base is, who the local partner, just like your media partners, who the local promoter is and what they're doing to help promote the sport. I think that all factors in. I think another level to that and what you've seen with respect to a lot of our renewals is, okay, you know, just like a hotel, you kind of need to upgrade the facilities. You need to upgrade the experience for people, for the fans from time to time, right? Some of these tracks are at a point where that makes sense. If we work hand in hand with our local partner and as part of a renewal, the agreement is that there's going to be a significant amount of money invested into the facilities. That enhances our business because, A, you're upgrading the Paddock Club and that experience and what that means. You're probably expanding it in a lot of cases. We've been selling out Paddock Clubs, so that gives us further monetization. I think, one step further, you're even enhancing the overall fan experience. You fix things like entry and exit and knock down travel times and traffic jams and that sort of stuff. That's part of the fan experience. If you're adding activities that they can do at the track, that's part of the fan experience. There's a lot that goes beyond just, here's the rights fee from the local promoter. It's all of that. I think all of that continues to build what Formula One is. If you go into, look here in the U.S., if you go into an old Pirate Arena, that's a different experience than going into the Intuit Dome in LA. All of a sudden, that's a vastly different fan experience. I think that enhanced experience accrues to the brand. Any sense how much more Paddock Club capacity you can add across the calendar as you look out over the next couple of years, and as you renegotiate these deals? Is it a material increase of Paddock Club inventory that could potentially come to market? I think that's two things. One, I do think there's increased inventory that will come to market as, again, I think Melbourne right now is undergoing their upgrade project. You've got other tracks doing that, so that will increase paddock capacity. I think the other thing is just almost product segmentation, and within the Paddock Club coming out with new products where you can also potentially create even a higher-end experience, whether it's the garage experience with, I'm not forgetting the name, Jamie, not Jamie. You have a number of super premium VIP tiers running the Las Vegas Grand Prix. Yeah, Gordon Ramsay, sorry. Gordon Ramsay, not just not just Vegas, but all the other, you know, been in multiple locations. Then, you know, with Soho House, again, a product that we introduced, I can't remember where the first place, I think it might have been Silverstone. I think there's that ability to take existing sort of capacity and actually reformat it in a way that you're creating a wholly different experience, that our team has been very creative about doing and coming up with those ideas. I think there's ways to do this that, you know, creates, again, different, differentiated high-end experiences. On Las Vegas, taking a few new approaches this year to pricing and packaging, also some focus on the cost side as well. Maybe you could just give us an update on how this year's tracking both from a ticket sales perspective relative to your expectations, and then on the profitability side, any way to maybe quantify, to the extent you're taking costs out or some of the key moving parts there. Yeah, look, on the ticket side, I think we said this in our last earnings call, but a couple of weeks, a month later, whatever it is, I think we still feel very good about how tickets are tracking year over year, but also just against our budget. We feel good about that. As you know, we introduced different pricing schemes and, frankly, altered capacity in different ways to try to meet what we thought was the demand side of things. I think that's all going well. On the cost side, when we've talked about this in the past, I think when you stand up a race, it's really hard to stand up a live event like that and not know for sure what your costs are actually going to be because there's stuff that happens just last minute, first time something's been done. I think you saw some of that in the first couple of years. Now, with the benefit of that time, that experience, that knowledge, and also with a group of partners in terms of the casino, in terms of casinos, LVCVA, all this working together to even out what that expense profile looks like, we can manage all that much better this year and going forward. I think you're going to see that in terms of profitability improvement for the race, without getting into specifics for this year, but also going forward. Last question was just a minute or so, leveraging capital allocation. Formula One, should the leverage generate a ton of free cash flow at the moment? Just would love to hear your latest thoughts on capital returns versus M&A. Yeah, so I think our, you know, with the acquisition of MotoGP, we did lever up to do that. I think, you know, first order of business is certainly to deliver off of that, which will take a little bit of time here. As we go forward, you know, what is the right sort of capital allocation for a company like Liberty Media? We've simplified our corporate structures, as you know. I think there is certainly consideration from the market as to what they think we should be. We are certainly aware of that and cognizant of that. As we look forward, how do we take this free cash flow and turn it into something that is accretive to our value, enhancing for the shareholders, is what we're always looking at, you know, between sort of how we get that back to shareholders or whether or not there's M&A that's appropriate for a company like us to do. I think there is M&A. I think if, you know, the bar is high to go do it, in terms of what those thresholds are because it's got to fit, you know, what our mantra is. Ultimately, as you know, I think John wrote in his book, you know, shareholders actualizing shareholder value, that is what we want to do. I'll have to leave it there. Please join me in thanking Derek for being a part of the conference today. Thank you. Thank you very much.