Liberty Media sells Quint to make room for synergies with F1 and MotoGP

Liberty Media unveiled today, Wednesday, November 13, its intention to reorganize its structure by separating the Liberty Live Group into an independent entity to be listed on the stock exchange. This spin-off project, known as the “Split-Off,” involves the transfer of Quint, a subsidiary of Liberty Media acquired in January 2024, from the Formula One group to the Liberty Live Group. In exchange, Liberty Live will receive certain private assets, with a cash consideration to be evaluated later based on the relative values of these assets at the time of the operation.

Greg Maffei, President and CEO of Liberty Media, explains that this spin-off aims to simplify the company’s capital structure, reduce the value gap between net assets and Liberty Live shares, and improve transaction liquidity for both entities. “The spin-off of the Liberty Live Group into a separate entity will simplify Liberty Media’s capital structure, is expected to reduce the discount on our Liberty Live shares compared to their net asset value, and will improve transaction liquidity for both entities,” Maffei states. “Since the acquisition of Quint, we have strengthened its partnership with Formula 1 and gained a better understanding of ticket demand trends from our fans, but Quint is also complementary to our interest in Live Nation, particularly as Live Nation expands its hospitality operations,” he adds.

The split will be done through the repurchase of Liberty Live’s shares by issuing new shares in a newly formed company, Liberty Live, Inc. As a result, current holders of series A, B, and C shares of Liberty Live will receive a corresponding series share in Liberty Live, Inc., thus making the two companies independent of each other and listed on the stock exchange. Liberty Media will retain ownership of its core assets in sports, including Formula 1 and, upon completion of the acquisition, MotoGP, while transferring control of Quint to Liberty Live, Inc., whose activities will increasingly focus on live entertainment and hospitality.

This split seems to follow a logic of specialization. Liberty Media, by focusing on motorsports such as Formula 1 and, eventually, MotoGP, is refocusing on its main strengths in sports, which are fast-growing activities with a global fan base and a well-established commercial infrastructure. In contrast, Liberty Live Group, with holdings like Live Nation, can shift more towards live entertainment and hospitality activities, which is particularly strategic at a time when demand for live events is surging. This refocusing allows each entity to more precisely target its respective target markets and adjust its investments and strategies accordingly.

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Liberty Live, Inc. will hold approximately 69.6 million shares of Live Nation, a significant position that underscores the close ties between Liberty Media and Live Nation’s entertainment operations. This new entity will also integrate various private assets, as well as the current debts and cash assigned to the Liberty Live Group. Meanwhile, Liberty Media will continue to hold and manage its leading sports holdings, including assets in Formula 1 and MotoGP, its equities, private assets, and financial obligations.

The timeline for this split remains subject to certain conditions, including specific approvals from Liberty Live shareholders and a favorable tax opinion. According to Liberty Media’s projections, the separation is expected to be completed by the second half of 2025, with the goal of making this transaction tax advantageous for current shareholders. Once the split is finalized, Liberty Media and Liberty Live, Inc. will be listed independently, most likely on the Nasdaq Global Select Market, although secondary options are being considered if necessary.

Greg Maffei will discuss this strategy in more detail at Liberty Media’s annual investor meeting, scheduled for November 14, 2024 in New York.