Liberty Media (LMCA) Q1 2016 Earnings

posted in: Earnings Call, Notes | 0

Liberty Media (LMCA) CEO Greg Maffei highlighted good pricing power in their Livenation concerts and advertising business 

“Live Nation, another very solid quarter, strong revenue growth, up 10%. Adjusted operating income growth, up 7% in constant currency in the first quarter and lots of exciting indicators through April. Concert ticket sales pacing 10% ahead, a 13% increase in confirms stadium, arena and amphitheater shows. Contacted online advertising, up 14% and contracted sponsorship, up 10%. So we’re pleased with the operating performance and what’s going on at Live.”

Liberty Media (LMCA) CEO Greg Maffei explained how they take advantage of their own stock if it trades at a discount to net asset value

“I think in general Liberty’s stocks have always traded at a discount somewhere between 2% and 35% if memory holds me since I have been at Liberty. And in general we’ve tried to take advantage of that through share repurchase. There have been other methods, but that’s the primary one. And we really don’t care about them until the day we want to go get realization and obviously some period before we are going to issue stock we would care a lot more about fair value and achieving it other than that realizations. You could think about some kind of a transaction for example where we issued an exchangeable into our SXM stock and bought back LSXM stock, so selling SIRI effectively forward at some number and buying our own stock back. So there are other corporate finance techniques which I’m sure much aggressive investment bankers will be bringing us tons of ideas after this call.”

Looks like they’re positioning themselves to make a deal in the near-term

“I certainly don’t have something we are going to announce this morning on what we intend to spend that money on, but we are looking at a host of opportunities actively, many of which I feel very good about.”

Liberty Media (LMCA) CEO Greg Maffei said his colleague, John Malone, ultimately believes in the US will become a quad play market (landline phone, television, internet, and cell phone combined on one bill and delivered by one company)

“I think first Liberty is informed by our Chairman experienced with Liberty Global and the quad nature of the market in Europe, and certainly John is a firm believer that eventually we will get to a quad market in United States. How that’s done whether that’s through partnership through MVNO, through Wi-Fi First through some larger kind of operation, we’ll see, frankly Charter has been less vocal and focused on that given its desire to get to the process on the regulatory side. So I think we are mindful of what the marketplace is in Europe, we are mindful of how the marketplace is likely to develop in United States and we’ll see where we go from here.”