Liberty Media Third-Quarter Earnings Fall

John Malone - Getty - H 2019
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The firm, controlled by John Malone and including such assets as satellite radio firm SiriusXM Radio, the Atlanta Braves and the Formula One racing circuit, saw higher operating expenses outweigh higher revenue.

Liberty Media, the company that is controlled by billionaire mogul John Malone and houses such assets as satellite radio company SiriusXM Radio, the Atlanta Braves baseball club and the Formula One racing circuit, on Monday reported lower third-quarter earnings as higher costs and expenses outweighed increased revenue.

Quarterly earnings came in at $262 million, or $193 million attributable to Liberty stockholders, down from $366 million, or $268 million attributable to stockholders, in the year-ago period. Operating income fell from $531 million to $507 million. The company's third-quarter revenue rose from $2.32 billion to $2.86 billion, but operating costs and expenses rose from $1.78 billion to $2.35 billion. 

SiriusXM recorded a 1 percent drop in operating profit to $459 million, while the company's Liberty Braves Group's operating profit of $21 million fell from $45 million. Formula One posted an operating profit of $44 million, up from $39 million in the year-ago period.

Liberty Media CEO Greg Maffei and other top execs at the company on a morning analyst call discussed how they are driving profitability for their varied sports and media properties.

Formula 1 CEO Carey Chase said bidding was strong ahead of ESPN and Formula 1 last month unveiling a new agreement to keep races on ESPN and ABC through 2022. "We saw increased interest from parties and  interest expressed in offers. So we feel good about it, but we still feel the U.S. market has a lot of upside for us," Chase said.

At the same time, contracts for the sport’s leading west European broadcasters are up for renewal in 2021, and analysts see that as a key barometer on whether Formula 1 can monetize increased fan engagement in long-established media markets.

"We're probably in the early stages of moving forward with those, given they're still more than a year away," Chase reported. And after Marvel inked a deal with SiriusXM to create exclusive podcasts for the subscription radio platform and its Pandora music streaming subsidiary, Liberty Media's Maffei said audio content has become a major growth business for Liberty Media after earlier forays into exclusive podcasting with Howard Stern, CNBC and ESPN.

"Podcasts is a space where you can really go to exclusives," he told analysts, with their economics being far more favorable than linear TV or streaming video. "It's still far less cost per-hour than you get in video. They're really attractive economically and really attractive for consumers, and therefore for distributors ... It really is one of our key focuses," Maffei said.

The Liberty Media boss also discussed sports gambling as a growth strategy for his Atlanta Braves team. "It's a revenue opportunity, but even more a fan engagement opportunity, which will only strengthen baseball as it becomes an opportunity to bet in-game, on parts of a game," Maffei explained.

He also pointed to Formula 1 last year unveiling a $100 million sponsorship and data rights deal with Interregional Sports Group, a sports marketing company, to share live track data to enable in-play betting during races.

Nov. 11, 8:00 a.m. Updated with comments by top Liberty Media execs made on an analyst call.