Liberty Media Quarterly Revenue Rises, Operating Income Drops

John Malone - Getty - H 2016
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John Malone - Getty - H 2016

The company, controlled by billionaire mogul John Malone, during an analyst call talked about how Formula One is handling the fast-spreading coronavirus outbreak.

Liberty Media, the company controlled by billionaire mogul John Malone that houses assets like audio entertainment giant SiriusXM, the Atlanta Braves baseball club and the Formula One racing circuit, on Wednesday reported higher fourth-quarter revenue but lower operating income.

The company's operating income fell 20 percent from $379 million to $302 million on higher stock compensation expense and higher depreciation and amortization, even though revenue rose 30 percent to $2.6 billion from $2.0 billion. 

Formula One's quarterly operating loss narrowed from $29 million to $23 million, while the Braves' operating loss widened to $45 million from $28 million. SiriusXM's operating income fell 15 percent to $370 million.

Revenue was driven by a 38 percent gain at SiriusXM, with revenue also up 9 percent at Formula One and 6 percent at the Braves.

Much of the analyst call for Liberty Media on Wednesday focused on the financial impact from the unfolding coronavirus outbreak on the Formula One auto racing series.

F1 chairman and CEO Chase Carey confirmed the Chinese Grand Prix set to take place in Shanghai on April 19 has been postponed due to the coronavirus outbreak. "We will continue to monitor the situation," Carey said, as he added F1 will not receive promotional revenue due to the delay in holding the race.

But F1 intends to go ahead with its April 5 race in Vietnam after Carey talked to local promoters this week. "We do intend to proceed with the race.... All systems are a go," he told analysts.

As Formula One plans for contingencies around the coronavirus outbreak, a key concern is logistics in traveling staff, car drivers and their teams and getting fans to and from race locations. "It's fluid. It's difficult to see where this plays out. Italy wasn't on the radar screen a couple days ago and now it is," Carey said.

Formula 1 is talking to contagion experts to plan for race dates that for now are set to go ahead. "Most of what we need to do is remain on top of the issue and get the right advice to plan. Part of what we can plan for is to ensure we have flexibility," Carey said.

Greg Maffei, Liberty Media's president and CEO, was asked on the call about merger and acquisition deal prospects for his company should the U.S. economy face a recession and financial markets also go into a downturn. "To the degree we have strong franchises, which I believe we do, we will suffer less in that kind of a downturn than many other businesses that may be equally strong, but aren't viewed as strong and don't have other pieces in place like a management team," he told analysts.

But Maffei added doing corporate deals in a down economy takes a lot of nerve. "What's the (Warren) Buffett line about being bold where others are fearful? That's not always easy," he said.