Liberty Media (FWONK) Q1 2026 earnings call transcript

I would now like to turn the call over to Hooper Stevens, SVP Investor Relations. Please go ahead. Thank you very much for joining us this morning for Liberty Media's first quarter 2026 earnings call. As we get started, I'd like to remind you that this call includes certain forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent forms 10-K and 10-Q, followed by Liberty Media with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media's expectations with regard thereto or any change in events, conditions, or circumstances on which any statement is based.

On today's call, we will discuss certain non-GAAP financial measures for Liberty Media, including adjusted oip doc, constant currency for MotoGP. The required definitions and reconciliations for Liberty Media are on Schedule 1 and MotoGP Schedule 2 can be found at the end of the earnings press release issued today, which is available on our IR website.

Speaking on today's call, we have Liberty's President and CEO, Derek Chang, Liberty's Chief Accounting and Principal Thank you, Hooper, and good morning, everyone. When we spoke with you in February, we framed 2026 around three priorities, sustaining Formula One's momentum, positioning MotoGP for long-term growth, and remaining disciplined and opportunistic momentum. Our framework remains intact, and we are seeing good progress across the portfolio. We delivered strong financial results this quarter at both F1 and MotoGP. Starting with Formula One, the sport continues to demonstrate the strength and resilience of its global platform. We made the difficult but appropriate decision, together with the FIA and local promoters, not to proceed with the Bahrain and Saudi Arabian Grand Prix in April, given the situation in the Middle East.

The well-being of everyone in F1 comes first, and we always manage the calendar with that principle in mind. While that creates a near-term financial impact, it does not change our confidence in the long-term trajectory of the sport. We will be thoughtful in our approach, and we will continuously evaluate the calendar this year. And as Stefano mentioned to Bluebird News last week, it might be possible to reschedule one race toward the end of the season. Formula One remains supported by strong fan demand, deep commercial partner interest, attractive media rights dynamics, and a stable long-term foundation with the new Concord Agreement.

The early season has also reinforced the value of the investments being made around the fan experience and distribution. In the U. S. , Apple's first season as our exclusive media rights partner is underway, and the initial results have been promising. Our partnership with Apple and its tech forward platform is already delivering early innovative enhancements to our F1 product, with multi-view, data feeds, and onboard features creating a more engaging viewing experience for our fans. Viewership increased through the first three races of the year. Fan engagement is up. We're attracting a younger and more female audience, and we're seeing expanded reach across the vast Apple ecosystem. Alongside Apple, we rolled out a series of dedicated marketing activations that significantly amplified the Miami race across both the city and the country, including nationwide Apple Store retail pit stops, Apple Maps integration, and the launch of new original F1 programming over race weekend.

We're extremely pleased that the high energy from our U. S. fan base and the broader race week has become a meaningful cultural and commercial moment for the sport in the U. S. At MotoGP, the first full season under Liberty ownership is giving us even greater conviction in the opportunity. The sport is delivering compelling racing with the calendar evolving to expand its global footprint, including the return to Brazil this year. We are also beginning to broaden the ecosystem around MotoGP through initiatives like the Harley-Davidson Bagger World Cup, which brings a distinctive new format and lifestyle brand into the MotoGP weekend experience. The broadcast of the U. S. Grand Prix on Fox reached an average audience of 500,000, which is an increase over last year on cable and an increase from the last time it was on broadcast in 2023.

We have also seen our social media followers in the U. S. increase 16% since January 2025, which is an encouraging indicator of growing engagement in the U. S. market. The strength of MotoGP is its compelling identity, fierce racing, extraordinary athletes, passionate fans, and a unique culture. Liberty's role is to help provide the commercial focus, operational support, and long-term investment discipline that can allow that identity to reach a broader global audience. That means building capabilities carefully, strengthening the event experience, improving fan engagement, expanding commercial partnerships, and sharing learnings across the portfolio where they are relevant.

Following the Liberty Live split off, our portfolio is centered around two world-class boards with strong brands, valuable global rights, and multiple long-term growth levers. We will remain thoughtful in our capital allocation approach as we support our operating companies as they invest in growth, and we will evaluate additional opportunities to deploy our capital. Brian will cover the financial results in more detail. Stefano and Carmelo will provide deeper dive on Formula One and MotoGP. We remain confident in the strategy we laid out earlier this year. Formula One has a proven global platform for significant momentum. MotoGP has meaningful long-term upside, and Liberty is well-positioned as we build the next chapter of growth.

Now I'll turn it over to Brian.

Thanks, Derek, and good morning, everyone. As a reminder, each quarter in 2026 for the Formula One business will reflect an incomparable race count and mix, with the exception of the fourth quarter. Additionally, due to our decision to not hold the Saudi Arabian and Bahrain Grand Prix in April, results in the first quarter reflect a 22-race calendar this year. The second quarter will be the most impacted with only five races expected to be held this year versus nine races held during the second quarter of 2025.

The change in the race calendar did affect the pro rata recognition of revenue and team payments in the first quarter. We expect the largest impact from not holding the two races in April to be from the loss of race promotion revenue, certainly followed by the hospitality and some minimal impacts to race-specific sponsorship revenue. We do expect relatively limited impact to sponsorship revenue as we anticipate the ability to offset some of that exposure with other races later in the season.

On the expense side, we will now recognize most of the expenses related to the disrupted races, and the net impact F1 will flow through the team prize fund calculation. Similar to revenue recognition, projected team payments in each quarter will be recognized pro rata over 22 races instead of 24. Now looking at the results for the first quarter, most of the strong growth in Q1 year-over-year results is due to one more race being held in the first quarter compared to the prior year period.

The change in the pro rata season-based revenue recognition and underlying growth in the business. The first quarter of 2026 held three races compared to two in the first quarter of last year with Japan included in the current year period but not in the prior year. For the first quarter, revenue grew 53%, adjusted boybid grew 102%, driven by the extra rates held in growth across all revenue streams from underlying contractual fee increases.

Media rights and sponsorship revenue growth was driven by the calendar variance related to recognition of season-based revenue with 3 out of 22 races recognized in the quarter, Liberty Media Corp were approximately 14% of season-based revenue, compared to two out of 24 races, or approximately 8% of season-based revenue recognized during the prior year period.

Sponsorship revenue also increased due to revenue growth from new sponsors, including Standard Charter. Other revenue grew due to higher hospitality, freight, and travel revenue from one additional event held. Hospitality revenue growth was also driven by strong underlying paddock club performance and other premium product growth. Licensing revenue and revenue generated after the reopening of Grand Prix Plaza in Vegas at the end of January. Adjusted oil day increase during the first quarter, driven by strong revenue growth, discussed above, outpacing expense growth. Increased operating expenses included higher team payments and expenses associated with hospitality, freight, and travel costs from the additional rates held, as well as an increase in new premium product offerings and higher freight, travel, and commission and other partner servicing costs.

The increase in SG&A expense was primarily due to unfavorable currency exchange rates and And higher personnel and technology costs offset by lower marketing expenses.

Team payments as a percent of pre-team share adjusted way, but over 51.7% for the first quarter of 2026. For the full year, we continue to expect to see an average of roughly 200 basis point improvement in leverage, in line with the average we've seen over the past four years. After 2026, for the remainder of the term of the new Concord Agreement, we expect the payout percentage to remain relatively stable. A reminder that team payments are best analyzed on a full-year basis due to the quarterly fluctuations in team payments as 8% of adjusted OIBIT.

Now looking at MotoGP, just a quick reminder that we closed the acquisition on July 3rd of last year. Our financial results prior to the date of acquisition are presented on a pro forma basis as though the transaction occurred on January 1st, 2024. The TENQ is filed, including results in U. S. GAAP for historical periods. The majority of MotoGP's revenue and costs are Euro-denominated and, as such, are subject to translational impacts from foreign exchange fluctuations. In the following discussion of results, I'll focus on constant currency results. Year-over-year comparisons are impacted by the mix of races, and MotoGP flyaway races generally carry higher costs, including freight, travel, and IRTA fees. I heard of these. MotoGP held three races in the first quarter, both this year and the prior year.

Revenue increased at MotoGP during the first quarter due to the race mix and increased sponsorship revenue, slightly offset by a small reduction in media rights revenue. Justed away, but also grew during the first quarter as revenue growth outpaced expense growth. Cost of MotoGP motorsport revenue increased due to the impact of higher freight expenses from race mix and increased fuel costs.

Looking briefly at corporate and other results for the year, revenue was $6 million, which relates to rental income generated by the Grand Prix Plaza in Las Vegas. Corporate and other adjusted EBITDA was a loss of $7 million and includes Grand Prix Plaza rental income and corporate expenses.

At quarter end, Liberty Media had cash and liquid investments of $1.3 billion, which includes $862 million of cash at F1 and $186 million of cash at MotoGP. Total principal amount of debt was approximately $5 billion at quarter end, which includes $3.3 billion of debt at F1 and $1.2 billion of debt at MotoGP, with just under $500 million at the corporate level.

F1's $500 million revolver and MotoGP's $100 million revolver both remain untrawn. At quarter end, Liberty Media's net leverage was three times. As a result of not holding two races in the Middle East in April at F1, we expect there could be a modest increase in trailing 12-month leverage during the second quarter of this year. F1 and MotoGP are in compliance with their debt covenants at quarter end.

And with that, I will turn it over to Stefano to discuss Formula One.

Thanks, Brian. The 2026 season is off to a captivating start as we kick off this next chapter in F1's history with new regulations, new teams, and new winners on the podium. Congratulation to Kimi Antonelli, who became the youngest driver in F1 history to lead the world championship and taking three consecutive races win after winning the Chinese, Japanese, and Miami Grand Prix. As you know, we made the decision to not go ahead with the Bahrain Grand Prix and the Saudi Arabian Grand Prix as planned in April to ensure the safety and security of everyone in the sport during a very fluid and uncertain time.

Saudi Arabia and Bahrain have been fantastic long-term partners, and we look forward to being back with our fans there as soon as we can. We were extremely excited to be back racing in Miami last weekend, and 2026 has represented the start of an incredible new era for our sport. The first four races of the season I have all sold out. Social media engagement is up year-on-year, and early TV data shows growing audience worldwide.

Far research also indicates a very positive response to the on-track spectacle, We will now turn the call over to the Liberty Media Corp Along with the exciting new activation with Apple our new U media right partner Engagement remains robust this season We welcome 1 million attendees to date with all four races selling out and the Australian Grand Prix setting a new attendance record The Paddle Club is already sold out for the nearly all or our remaining races this season with over 65,000 tickets sold to date. This figure is already in line with our 2025 total Paddle Club attendance.

To accommodate demand, we are increasingly Paddle Club capacity decision at Silverstone, Austin and Monza, and our promoters are working to increase capacity at the other circuit. Our successful collaboration with Soho House and Lewis Hamilton, House 44, is also expanding and will feature at nine races locations this year, up from five after the launch last year. House 44 is already sold out at A-Races so far. In addition, our collaboration with Gordon Ramsay continues to grow with a new paddock-based premium offering operating in Shanghai, and we are looking into opportunities to roll out the experience at other relocation, potentially starting with the United States Grand Prix in Austin. Live audiences across our top 14 markets are up year-over-year relative to 2025 across the first three races, driven by strength in key markets including Brazil, Italy, and China.

This season, we return to Global TV free-to-air in Brazil. In China, we kicked off our new media rights deal with the CCTV, and are seeing more extensive coverage. The live broadcast of Chinese Grand Prix attracted 1.9 million viewers in China, a plus 60% increase year-over-year in one of our key growth markets. Our YouTube content generated almost 600 million views through the Japanese Grand Prix, up 46% relative to last year.

We grew our following nearly 20% year-over-year with over 120 million social media followers as of the end of April. Thank you. Also tuning in for longer, with total viewing hours increasing relative to the line linear last year. The average viewer of F1 content on Apple is both younger and more female. The sport is featured extensively within the Apple ecosystem and externally through innovative partnership with Nectis and Tubi, just to name a couple. Our broadcast of the Miami Grand Prix at the IMAX Theatre was extremely well-received and continues to highlight the new ways we and Apple are bringing the sport to fans.

We continue to see Mayo brand alignment between our two iconic global brands as we set out to take a more forward-looking approach to how fans discover and consume Formula One. Globally, our F1 TV product continues to perform well, with F1 TV revenue increasing 28% year over year. We were delighted to announce yesterday our five-year renewal with Sky in the UK through 2034 and Italy through 2032 inclusive, that will take us into the next decade with our incredible and long-term partner. The depth and quality of the programming and content Sky delivers has been impressive and helped to engage and grow our fan base in both the UK and Italy. In the UK, total viewing under Sky has increased by 90%, with female viewership more than Dublin and under 35s viewership growing 120% since becoming the exclusive home of F1 in 2019.

In Italy, we have seen a 25% increase in viewership this season, in part driven by the strong performance of Ferrari and Kimi Antonelli. Sky has been a trusted partner of F1 with world-class coverage, and we are delighted to extend our partnership into the future. And suddenly, we remain active in our negotiation and renewals, recently renewing with B-In in Pan-Asia and with Foxtel in Australia. We are also thrilled to announce we will be returning to race at Turkey-Istanbul Park next year for the first time since 2021, under a new five-year agreement. The return to the Turkish Grand Prix will be exciting for the F1 fan, drivers and teams. The Formula One continues to grow stronger in Turkey, where the sport now reaches more than 19 million fans, and almost half of the fan base is under 35.

We are also seeing strong momentum on digital and social platforms, with Instagram followers growing by 30% year on year. We also officially began the 2026 public sales cycle for our fourth edition of the Las Vegas Grand Prix today. Thank you. And official insurance, Baruchanen Partners. We have also extended our sales for an all-win partnership, all effective this season.

Our momentum continues to accelerate across our other revenue streams, including licensing and hospitality. We have announced our multi-year extension with Fanatec, our sim racing hardware company, and we launched our e-sport championship, hosted two live events to date and one in our new on-site facility, We are fully leaning into our first full year of partnership with Disney, including the successful launch of Disney and F1 Fuel the Magic campaign in the Asian Pacific region. At the Chinese and Japanese Grand Prix, we launched specialty F1 Disney stores in the fan zone, driving overall retail sales during the quarter up 125%, with China retail sales growing nearly 80% year over year. We reopened our Grand Prix Plaza site in Las Vegas at the end of January, and yearly performance has been encouraging.

Average weekly attendance this year is nearly peak levels from 2025, with private events occurring weekly. Demands for F1 drive has also been particularly strong, with multiple sold-out weekends. We remain focused this season on cultivating and fueling the fandom with our always-on strategy through beginning the creativity, thrill, and excellences of our ever-evolving sport and entertainment platform to the fans.

While we have grown so much in such a short amount of time, we believe we are just at the beginning of what is possible for Formula One. The momentum we see across our business continues at a remarkable pace, and the foundation we are building today will create enduring value for our partners, shareholders, and our fans for the years to come.

Avanti tutta. Full speed ahead as always. And now I will turn the call to Carmelo to discuss MotoGP.

Good morning and thank you, Stefan. We have a strong start to the beginning of our season, with compelling storylines on track and continued momentum across the business. With Liberty Media's continued support, we are confident in achieving the long-term strategic vision of our sport and are encouraged by the early progress we have seen today. As you have seen, we have made a decision to postpone our Qatar Grand Prix to November, given to the ongoing situation in the Middle East. We look forward to returning to the division soon. On track, the racing remains as competitive as ever, while Marco Vesechi continues to beat the Riders' Championship. We have already seen seven riders across five different teams on the podium this season, highlighting the unpredictable and excitement that define our sport.

We welcome more than 720,000 fans across our first four races, including a record of 228,000 fans in Buriram. We also returned to Brazil this season after 20 years IATUS in the country, with depth city-to-circuiting integration and deliberate and exciting race weekend. Brazil is one of our most engaged markets, with over 80% of fans consuming MotoGP content weekly. Across the Spring and Grand Prix in Brazil, our broadcast audience surpasses over 1.6 million viewers on band. We look forward to returning next year alongside of our returns to Buenos Aires and Australia, both of the new circuits in or near city centers, bringing the thrill of MotoGP racing closer to our fans. We continue to track brand awareness and engagement through our fund insights platform, which will support our commercial evolution and localize content initiatives in growth markets, including the UK and USA.

We ended the quarter with nearly 62 million social media followers across our own platform. Video views across our digital platforms, including video pass, increase almost 40% on the same periods of 2025. We also continue to make progress with our commercial partners. We have extended our partnership with Servos TV in Austria to broadcast our rights through 2013. Starting with the Austin Grand Prix decision, we are suspended our partnership with Quint through an exclusive multi-years agreement. With Quint's invaluable experience, we are focused on scaling our hospitality offering, enhancing the premium hospitality experience, with the VIP Village and driving further mixed-shift improvements towards high-end customers and partners. We are encouraged by the strong start to the year and the quality of demand we are seeing across our portfolio, with double-digit growth in ticketing volume and sustaining momentum across all regions as we roll our new innovation across our hospitality product suite.

We look forward to continue to update the investor community on our progress. Now I will turn the call back over to Derek.

Thank you, everyone. We appreciate your continued interest in Liberty Media, and with that, we'll open the call up for Q&A. Operator?

Sure. Thanks, Sean. Let me take the second one first, and then I'll hand it over to Stephan else for a bit on the sponsorship. I think on capital allocation, we've been pretty clear in recent history here that our primary focus has been the D-Liber, which we clearly are in the process of doing, as well as looking at strategic investments and ultimately also the thought of capital return to shareholders. I don't think we're in a position right now to say, hey, we're pursuing one over the other. Our options are on the table, and it's something that we are, you know, looking at on a regular and, frankly, a daily basis. That's the job of the folks here.

So, and then just, you know, we are very focused on the performance of our operating companies and leaning into those and continuing the strong performance that we've seen there, Which puts us in this position to be able to have the question that you've asked. And also, finally, I think just in the very near term, we clearly are very bullish on our businesses and where we see them going.

We can't control every macro factor out there. We don't have a crystal ball. So, you know, to some extent we're being a little bit conservative right now, and we make sure that we understand the implications of some of the other events that are happening out there. On the sponsorship side, I will let Stefano talk a bit about sort of his mix of the renewals and new sponsors and where he sees some of that going.

Thanks, Derek, and thanks, Chance, for the question. If I go back a couple of years ago we always said that our duty is to make sure that what we are offering is solid and genuine and only solidity and genuity has allowed us to be stronger in this momentum And if I just think back, no one would have thought that, for example, in the category of brokering, there will be someone who really wanted to invest in our platform to develop their business. So it is true that now, as we said last time, we see potential to keep growing because we have done a lot of new steps in terms of creativity activation that has allowed us to offer something new in the market to different partners.

It is true that on the other side, what we have done is basically moved also from normally what has been considered a B2B partner also to B2C. We have seen that in the last couple of extension renewal or a new entry. And it is clear that the category of high tech is the category where we can find some other opportunity in the future, Even if the big partners that we have now are basically very, very interested to lock down in the future in order to prevent others to come in. So it's a great situation we have. And I go back to the fact that for us now is really a matter of keep growing, keeping offering something new to the partners, giving the momentum of what we can offer in a very genuine way.

And that is really, it has been so far a successful strategy that we continue in the future. As you said, Sean, now we are also in the process of having active renewal much more in advance before the expiry date. That means that everyone believes in us, and this is something that we feel we take back home as a great responsibility.

Thanks very much.

Sure. Hey, David, thank you for the question. I think I'll start and let Stefano take it, but there are no clear implications as a result of the deal. I think one of the things to think about is whether it's sponsors, media partners, local promoters, what we're really asking a lot of these guys to do as they partner with us is to invest in the product. And in order to do that, you know, you want them sort of confident with the relationship and where things are going to be on a longer-term basis. So sometimes we are entering into these discussions early to facilitate that, exactly that. And you see that at a lot of the, you know, local promoter deals that Stephano has done in recent history, which are really to then facilitate increased investment and sort of the infrastructure, hospitality, things like that.

And it's a similar sort of concept here as these guys continue to work with us to build sort of the next gen of what the viewing experience is like. It's the both of us to sort of lock up in a manner like this. I'll let Stefano elaborate on that.

Thanks, Derek. I would add on top of what you said to answer the question of David is, first of all, let me thank Dana Strong and all the teammates, Kai, for the tremendous job they've done since the first day that they are with us. And now this is an extension of an incredible deal that will cover a very important area of where our fans are very solid, that is UK, Ireland and Italy. And it, of course, will have an impact that will be on long term, because as Derek was saying, you know, the financial implication up to the end of the 2008 expiry has not been touched. We're just looking ahead with a more and stronger financial and technical contribution.

It is true on the other side, they are already very, very focused on delivering, you know, new extra content, not only using the so-called broadcasting operation. They have a big voice in influencing a great demand that is growing in these markets, and that's something that we want to recognize to them. And on the other hand, we do believe that the privilege of being a worldwide sport, we can really understand where we do believe that the shifting between traditional broadcast and investor streaming is moving. We do believe that in the market that we have signed the deal as an extended agreement with Sky, the situation we're having will be the best even middle and long term.

That's why we are very, very convinced that this relationship will continue to create an incredible demand of interest and the right product that will serve in this market to grow. And, of course, in other markets, the situation could be seen differently because that's really where we are, understanding what could be eventually other opportunity that we can take, for example, in new markets that could be potentially very interesting in the future to bundle with other sports. Why not? So we need to be creative. That's what has been always our approach, to try to find the best solution with our partners that have contributed so much for the growth of our sport.

Yeah, thanks for the question, David. Now, the budgeting approach is similar to past years, and the biggest variable that we've had over the last few years since we've launched the Vegas race is the Vegas race. So there is certainly some conservatism in there around Vegas just to give ourselves room as it relates to the team payments. But the 200 basis point decrease that we kind of gave you guys at the end of the year, that still holds true.

Right now, we're focused on a 22 race calendar, and as Derek said, we're still hopeful that we can move one of those races to the back part of the year. If so, that would be upside. But that's what's in the forecast at this point is the 22 races.

Let me take the second part of that first, and then I'll go back to the paddock club and then turn it over to Stefano so he can talk about that. But on MotoGP, I think the context for Moto really is we've said it, and we're going to continue to say that the U. S. is an important market for MotoGP, and so we are looking at all avenues to grow our business here. It's going to take time, just like it did with Formula One, but we do see that there's an appetite and that there's going to be a market here. And how we go about that clearly will be we do have interest in adding races in the U. S. Miami would seem to be a logical spot because there's already a track there.

There are a lot of things that have to get worked out, whether it's Miami or any other track in terms of whether or not it works for MotoGP and sort of the safety concerns and stuff like that, where you've got different requirements than Formula One, as well as what markets, frankly, make sense from a commercial standpoint. But those are conversations that we will have with Miami and with other folks also trying to scope out what the right locations would be for U. S. expansion.

As it relates to Miami itself, they did announce over the weekend that they are expanding paddock capacity. I think that Stefano has spoken about this on many occasions in terms of the way we're structuring a lot of our promoter deals going forward is really a lot of it's the expansion of high-end hospitality. We saw that in Budapest. I think we announced Boston recently. They've got a whole new building going up down there around the first term. But I'll turn it to Stefano for a little bit more detail on his thoughts.

Thanks, Derek. I mean, let me take the opportunity to, after the end of that incredible Grand Prix in Miami, to thank, you know, Tom Gawdick and Casey for that incredible organization. It's been really a phenomenal event with a lot of people, a lot of action on the track. And it's true, as we just mentioned, that they're going to invest even more to make sure that the quality and the capacity of that event will be even bigger in the future. But that goes back to what we said, I think, the other time. There are certain places or certain events that we believe are fundamental for the growth of our sport, and by giving the possibility for them to have a long-term deal, we'll push them also to invest in the right way.

And on top of what Derek has just mentioned, we won't remember that also Monza will do that, Hungary will do that. Almost everyone will have plans to increase capacity with the right quality of the offer. That is something related to the request. The demand is very, very high. The profile of the customers that are coming now also with the new partners require a different possibility of expanding that. In Monte Carlo, in Monaco, for example, you know, we have extra capacity. We have also, with the part of MSC, a boat where our guests can exploit a different kind of experience. So, all is connected to the fact that the ecosystem is solid, strength together, working with the vision to keep growing the business.

Otherwise, no businessman will invest in something they don't believe will be beneficial also for their interest, which is normal. Therefore, as I said, this is another signal, I do believe, Stephen, of the quality and the performance of our sporting platform today.

Yeah, I mean, this quarter, the three biggest drivers are you have – you do have an FX impact in the SG&A number that's negatively impacting the growth. So, you know, we'll see how that fluctuates as the year goes along. There are also some higher personnel costs and some SG&A costs around LBGP, which are also kind of more personnel related, and I think those are a bit more front-end loaded. That's offset by reduced marketing costs because remember last year we had the 75th anniversary event. So those are really the big drivers. There's some increased IT spend in there as the company's working on, you know, different types of projects.

Yeah, on the first part of the question, any impact from adding an additional race would come through in that quarter in which you make that change in the calendar.

On the second part of your question, David, DNA, it's up a million bucks. You know, the company's been investing in their operations facility out in Biggin Hill. So, you know, you see increased depreciation associated with that building, which was – that project was largely completed early last year. So, that's probably what's driving the bulk of that difference. You also have GPP CapEx that was in our results early in 2025. So, you'd see increased depreciation associated with that.

Thanks, Matt. On the Apple question, I will let Stefano take most of that. I think that what we've seen, though, is the viewing across all segments of sort of the race weekend has been very strong. I think that Apple has done a great job of bringing people to the ecosystem. I think that, you know, on the risk mitigation side, I think people probably, anytime you change broadcast partners, you always run the risk of having a lot of fan outlash that they can't find it or things like that or it's not as good. And, you know, we haven't had any of that. In fact, it's been to the positive in terms of how consumers have been interacting with product, with the viewing, and sort of the commentary out there has been a good experience for them.

But I'll let Stefano continue on that, and then we'll come back to the calendar question on LTP.

Thanks, Derek. Matt, I would say to add on what Derek had just said, we do not have to forget two things. Our fan base is younger, and there are a lot of emails, also around 40% in the U. S. , and that's why we do believe that, you know, Apple will guarantee to them a much more suitable way to live that experience. We don't have to forget that the other positive effect of what is a journey that just started, we just did only four races, and of course, it will be a long deal, so every weekend there is something that we learn and will improve. There is the possibility, as it has happened, for Apple to use different platforms, IMAX, 2B, stores, and other activation that's being done will generate more interest and more followers.

And I would say it's a more dynamic way to lead that sport, and that is in line of what we're going to see. I mean, there is a tremendous effort on Apple also to deliver some new technical content, and it's a long-term journey that so far has been very, very successful because we're just at the beginning of a new journey where I would say on top of the four races, the first three were not really, let's say, time-friendly for the U. S. market. And as a global analyst, for what we can see, it has been a very, very positive start of the season. So that's why we do believe that this is just the beginning of something that will create even more attention for the future, and on which I can confirm, because EDQ was present in Miami, Apple is full on board.

Full on board, confirmed by EDQ, but also the future CEO of Apple that is a racing fan. That is not bad.

And for the second question, I would say I go back to Derek, if it's okay. No, thank you. Thank you, Stefano. So on the MotoGP, I'll start and I'll turn it over to Carlos for some additional commentary. But I do think that our stated objective is to get some of these races closer to, you know, cities where we can leverage off of the infrastructure, whether it's the airport and long-distance travel or for both ourselves as well as for the fans who are coming in internationally and the hotels and the restaurants and sort of ease of access, I think, is important. And you're seeing this with sort of the races we announced for next year, both in Buenos Aires and Adelaide.

So we're already starting to make progress on that. That being said, you also don't want to just wholesale change out all the races. We have a long heritage here of races and many, many, you know, compelling locations where, you know, it makes a lot of sense to keep them there. And they've been pictures on the race calendar, and they bring a lot to the sport and a lot to the identity of the sport. I have been, you know, this year already to Austin. I've been to Jerez, headed to Mugello, and Austin later this year. We really want to get a good sense of what it feels like in the different locations. Because what we want to do is create a band experience that is engaging, exciting, entertaining, accessible.

We have a lot to be learned on locations where we may not move, but how to improve those. It's a mix of all of that as we think about our calendar moving forward. Carlos, you may have a couple words to add to that.

I'll let Brian start with the fuel question, then he'll turn it over to Stefano for the racing question.

Yeah, Steven, thanks for the question. On fuel, it's a little bit different for the two businesses. As you rightly point out, at F1, if we have increasing fuel costs and freight costs, those are generally passed through to the teams. So there should be, you'll see a bit of a gross up on the income statement throughout the year, but pretty minimal impact to net margins. On MotoGP, it's a little bit different. There's more of a kind of a fixed structure there. So to the extent we experience rising fuel costs, you might see some pressure to our overall cost of revenue without that offset on the top line. Stephen, do you want to take the racing question?

Thanks, Eric. Stephen, I mean, I think that what we see is definitely from an experience point of view, something that you were expecting. You know, F1 is a big beast. When you come in, we are, of course, very, very pleased with what has been the new entry. But the process is not related to money, it's related to experience and time. This is something that has been always, you know, elements that happened since the beginning of this sport. It's a big technological challenge. It's a work of team players that need to understand what is, you know, the dimension of the challenge. It's something that, of course, is related to the fact that they are new, and they will have the chance with the budget cap to have less burden in respect to the past.

So it's just a matter of being a little bit patient, even if, you know, when in a racing world, after only four races, you believe that it's 400 races, because every day, every minute, you know, the pressure is getting higher. The advice that I would say they know very well is not to fall in that kind of anxiety because the anxiety will not help to be even more performant. The beauty of what we have seen in a totally different scenario of a totally new regulation is something related to the fact that there is a lot of margin for the improvement. That, of course, the more you are behind, the more could be bigger if you are able to take the right stream of development and if you're working hard with your drivers and teams to improve the performance.

And in this specific year, there are so many new elements that could allow them to be even faster if they understand where to focus the need for them to recover the gap they have now.

Sure. Look, I think we are evaluating all the various alternatives and trying to make decisions in a timely fashion that will give us as much wait time to the extent we make changes and make adjustments. But I'll let Stefano talk through some of those specifics as he and his team are working overtime trying to keep up.

Yeah. Thanks, Derek. Thanks, Joe. I mean, to be very direct, I mean, to avoid any speculation, you know, the only thing I can say that we have plans, hopefully not to be applied because we really hope that the situation for the world, not only for the racing, will go back to normal situation. We have plans, of course, the lead time or the cutoff really is different between the fact that we can eventually recover what has not been run in April versus what could eventually happen or not happening in the end of November, beginning of December. We are, of course, aligned with the teams, with the promoters, because that's something that has a big chain of reaction.

But we are in the due time. We will keep everyone informed. But I hope you understand, Joe, if you just say something, there will be a speculation that we want to avoid, because as I said, the first hope is to make sure that we go back in the place that we should be.

But Stefano will probably give you more color on the broader halo effects.

I mean, the other fact, thanks, Ian, is what we said at the beginning, is the fact that the activation is getting bigger, better in terms of quality. Of course, we want to be as creative as possible without taking away the quality of what we're offering to our customers and guests. But of course, the fact that we have bigger audiences is pushing the ecosystem to try to find solutions. And this is good because everyone is on the same page and the F1 sponsorship package is really very, very solid. If you believe, if the question is related to what will be the effect on this year, definitely the effect on this year is to not relate to have more numbers because it's already almost sold out everywhere.

So this is also even better because it will allow us to grow in the future on numbers that are not yet indicated in the account that we have today. So it's just something that goes back to the long-term strategy, and all the partners and sponsors will be part of this incredible growth that we really do believe will happen even in the next couple of years in front of us.

Thanks, Stefano. And I think with that, we will conclude the call. Before we end, though, I did want to say a special thank you to Carmelo and Stefano and their teams, just because managing through sort of some of the disruptions that we've had, I realize the events in the Middle East have hit most companies, but obviously very directly to ours in terms of a lot of the rescheduling and logistics and thinking through contingencies and all that. So we're on it, and I wanted to thank those guys and their teams because they've been working overtime. And I want to thank everyone on the call for taking the time. We always appreciate your interest in Liberty Media and look forward to speaking with you guys again soon.