Liberty Media execs discuss future of live events

The top executives with Braves owner Liberty Media expressed confidence Thursday in the viability of the live-events business post-pandemic, but acknowledged that events may not be as large-scale or profitable as before.

Liberty Media, which also owns the Formula One auto-racing circuit and a large stake in concert promoter Live Nation, addressed the issue in response to a question at its annual stockholders meeting, held virtually.

“I think we’re taking a cautious attitude to the belief that things will adjust and change, that we can build businesses that operate in a post-COVID world,” Liberty Media president and CEO Greg Maffei said. “Whether that’s through better therapeutics or a vaccine … or just changed procedures, there will be ways to have live events.

“Will they be as scaled or profitable as historically? I think that remains to be seen, so we’re taking a step-by-step cautious attitude.”

John Malone, the billionaire chairman of Liberty Media, said he still believes in the business of live events, in part because of their value as TV programming.

“The original thesis of live events representing perhaps the best place to be on content for television or for digital distribution, I think, remains intact,” Malone said. “Unfortunately, we’ve had this pandemic. I personally believe that there will be a therapy and/or a vaccine, sooner rather than later, that will get us back closer to normal.

“There’s undoubtedly going to be a hangover in terms of (investment) valuations,” Malone continued. “If this depression in valuation is excessive, it presents opportunities for those of us who believe in the longer-term thesis that this is a good place to be, live events — particularly where … a substantial part of your revenue has little to do with the gate attendance and a lot to do with television and ultimate digital distribution.”

Malone and Maffei didn’t discuss the current proposals to start the delayed 2020 baseball season. MLB is in negotiations with the players’ union about possibly beginning regular-season games without fans in attendance in early July if an array of financial, logistical and health issues can be worked out.

The Braves have offered ticket refunds for games originally scheduled in April and May, and Maffei indicated he's encouraged by "the number of Braves ticket holders who have deferred and waited to see what, if any, schedule will arise. Knowing that they could get a refund, (they) nonetheless have said … hold my money and hold my place.

“There is demand for live events,” Maffei said. “The question will be what can we do in the world of vaccines and therapeutics and social distancing to make those work for everybody involved, safely.”

The Liberty Media executives noted that their live-events businesses have made adjustments to their balance sheets, including taking on additional debt, to ensure liquidity during the coronavirus crisis. The Colorado-based company previously disclosed that the Braves' debt rose to $698 million as of March 31, an increase of $139 million during the first quarter of this year primarily because of drawdowns on the team's revolving credit facilities.

“It is what it is, so the question is how do you manage your hand from here,” Malone said Thursday. “I would say the No. 1 thing obviously (is) that everybody has been scrambling to improve their balance sheets so that they don’t have liquidity problems over the period that this is expected to really depress the business.

“Some would end with perhaps more leverage on them than they would like. Others, the impact will not be that material,” Malone said. “I think the thesis of live events is still a good one, and I believe that there will be a health solution here, not a structural solution, that will return these events. Human beings are gregarious by nature.”