SiriusXM Parent Liberty Media Swings to Loss Amid Pandemic

John Malone
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John Malone Chairman of Liberty Media Corp attends Allen and Company's 31st Annual Media and Technology Conference on July 12, 2013 in Sun Valley, Idaho.

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 Monday reported second-quarter financials as the novel coronavirus pandemic delayed events in its sports operations.

Liberty Media posted a loss attributable to its stockholders of $326 million, compared with a year-ago profit of $116 million on a 32 percent revenue drop to $1.91 billion.

Quarterly revenue at SiriusXM fell 5 percent to $1.87 billion, while revenue tumbled 96 percent at the Formula One Group to $24 million and came in at $11 million at the Braves, down 95 percent from the year-ago period. Operating income fell 5 percent at SiriusXM to $398 million, while Formula One swung to a $122 million operating loss after a year-ago profit of $26 million, and the Braves swung from a $36 million operating profit to a $30 million loss.

"Live Nation suspended all large-scale live entertainment events," the company also noted.

"Our employees and management teams have demonstrated strong leadership navigating the health and financial challenges presented by COVID-19," said Liberty Media CEO Greg Maffei. "We saw the highly anticipated returns to racing at Formula One and to the field for the Atlanta Braves, while SiriusXM posted solid results."

Maffei on a morning analyst call addressed interest his company had in iHeartMedia after recently receiving anti-trust approval to raise its stake from just under 5 percent currently to control or potentially outright ownership. The Liberty Media boss argued he wasn't in any hurry to dramatically raise its stake in iHeartMedia, whatever the synergies to be had with SiriusXM.

"Ultimately, the goal would be to get to full consolidation. Whether that takes longer, it's not something we could do out the box. So right now we're pausing on all that," he said on the call. Maffei told analysts that the cash flow demands on SiriusXM, as it gets into podcasting and other new revenue streams, was more enticing.

"iHeart has a great management team. We like the business. But clearly advertising is challenged in this environment and we want to watch and see what happens," he added.

The advertising recession has reduced national, local and network revenues for iHeartMedia, which in turn has been looking to offset reduced traditional radio station revenues with podcasting and digital revenues that Liberty Media is pursuing, opening the ways for synergies.

Maffei was also asked as Liberty Media gets into podcasting whether competition from Spotify after it inked a multiyear and exclusive licensing deal with Joe Rogan and The Joe Rogan Experience will drive up the cost of content for audio programming much as has happened with A-list talent in the film and TV space.

"There's certainly some people who have been signed to exclusives that have an audience. But there's so much high value content that hasn't yet come onto podcasts that we believe will come onto podcasts," he told analysts. Maffei argued the recent deals for Stitcher and Simplecast aimed to help emerging talent get into podcasting, where he saw untapped revenue streams for Liberty Media.