Walker Webcast: Media, Sports, and Entertainment: A Talk with Greg Maffei


Greg Maffei oversees the Liberty Family of companies, which owns subsidiaries like Formula 1 and the Atlanta Braves, as well as interests in SiriusXM and Live Nation Entertainment. In addition to overseeing this wide array of companies, he also serves as President and CEO of Liberty Broadband Corporation, which owns considerable stakes in Charter Communications and GCI, an Alaskan Cable Company. Greg also serves as Chairman of Live Nation Entertainment, SiriusXM, and Trip Advisor.

This incredible list of positions is only a small portion of his ever-growing resume. To hear about Greg’s full list of titles, as well as his takes on everything from Formula 1 to lessons he learned from Bill Gates, check out our chat in a recent episode of the Walker Webcast.

Lessons From Bill Gates

One of the accolades that we didn’t mention above is that Greg served as the CFO of Microsoft throughout the 90s, so he spent quite a bit of time with Bill Gates. Throughout the time they spent together, Greg picked up some very important business lessons from Gates—the most prominent of which is to remain unbiased when trying to solve a problem with your team. Often, leaders become infatuated with their own ideas and find being objective very difficult.

Fortunately, this was never an issue for Gates. Greg recounted how Gates would call meetings to discuss an issue, and then put his proposed solution to the side when he heard a better idea from one of his team members. This is likely one of the many reasons that Microsoft has become one of the largest companies in the world by market cap.

Buying and Marketing Formula 1

Prior to Liberty Media’s ownership of Formula 1, the sport had been rather stagnant for a few years, with little penetration into the American market. However, Greg recognized that there was potential to build the brand into a high-growth sports franchise. He saw a sport that was very entertaining, with lots of potential but little marketing behind it and no push for expansion into the US. So, when Liberty acquired Formula 1, appointing a marketing legend like Chase Carey as CEO was a no-brainer.

The Formula 1 acquisition has been a home run for Liberty Media. With top-notch marketing execution, and a hit Netflix series, Formula 1: Drive to Survive, the sport gained incredible popularity in the US and globally. Seemingly overnight, Liberty Media went from a business that only paid for sports rights to one that also gets paid for sports rights. This, of course, was a welcomed change by Greg and his team.

Want to Hear More?

Each week, I am privileged to interview industry leaders and innovators like Greg Maffei. To hear the full interview with Greg, or to see our list of upcoming guests, be sure to check out the Walker Webcast!

Webcast Transcript

Willy Walker: Good afternoon to most people on the East Coast and good morning to those of you in Western time zones. I am here at Liberty Media's headquarters in Englewood, Colorado, with my friend Greg Maffei. Greg, great to have you.

Greg Maffei: Thanks for having me.

Willy Walker: I usually have everything memorized for my interviews, but your resume is so extensive, Greg, that I'm going to use a note to just start us off, so I don't get anything wrong on this.

Greg Maffei: Is that a nice way of saying I'm old? Hahaha!

Willy Walker: No, not at all. That's a nice way of saying you have a lot going on in your life. I will say I did Alex Rodriguez two weeks ago, and it was very easy to interview A-Rod. You're far more complex to introduce. So, I'll read through this and then we'll dive in.

Greg Maffei oversees the Liberty family of companies as they compete in the digital mobile era. Liberty's stocks have consistently outperformed the indexes and peers. Liberty Media ranked #8 in Fortune’s 2022-2023 World’s Most Admired Companies in the Entertainment Industry.

Maffei serves as President and CEO of Liberty Media Corporation, which owns media and entertainment businesses, including subsidiaries Formula 1 and the Atlanta Braves, and interests in SiriusXM and Live Nation Entertainment. He is President and CEO of Liberty Broadband Corporation, which consists primarily of a 26% stake in Charter Communications and Alaskan cable company GCI.

Maffei also serves as Chairman and CEO of Liberty TripAdvisor, which holds a controlling interest in Tripadvisor.

In addition, Maffei serves as Executive Chairman of Qurate Retail, Inc., which owns digital commerce businesses, including subsidiaries QVC, Home Shopping Network, and the Cornerstone Brands. Maffei also serves as Chairman of the Liberty-related companies Live Nation Entertainment, SiriusXM and Tripadvisor, and as a Director of Charter Communications and Zillow.

Prior to joining Liberty in 2005, Maffei served as Co-President of Oracle, Chairman and CEO of 360networks, and CFO of Microsoft. He has an MBA from Harvard Business School, where he was a Baker Scholar, and an AB from Dartmouth College where he formerly served on the Board of Trustees.

All right, that's the bio, Greg. Let's start here. I was with our mutual friend David Faber last week in New York on Squawk Alley. And every time I watch you and David have an interview, the two of you go back and forth on the Mets and the Braves. You own the Braves and you're, I think, up a 12-game lead over the Mets right now?

Greg Maffei: Yes. This is not the year that David's going to be giving me grief. We've got a seven-game winning streak. We're a substantial lead in the NL East, a substantial lead in the National League all together team looks particularly good given that two of our best pitchers have been on the IL and don't come back to the middle of July in the middle, the first week of August. But we still are looking very tough.

Willy Walker: Owning the Atlanta Braves, being a Colorado based company and also being a company. And we'll get into this in great detail that has lots of synergies amongst the various portfolio companies that you have. Why the Braves?

Greg Maffei: Well, it sort of goes back to where we came from. You know, Liberty was the repository for a whole bunch of interests, the TCI, which was sort of the Comcast of its day, the largest cable company got. And that included a stake in Turner Broadcasting, which eventually became a stake in Time Warner. And we traded our stake in Time Warner for cash in a tax-free manner and the Braves back in May of 2007. So that's how we sort of worked our way out of an economic position. And we thought there was an attractive transaction and there was upside in the Braves. And they've done very well.

Willy Walker: They've done extremely well, including winning the World Series. Let's back up and then we'll kind of zoom forward like an F1 car to where we are today. But as we back up Groton School, Dartmouth College, Harvard Business School, quite the pedigree. Always the smartest guy in the room?

Greg Maffei: Oh, God, no. I know those are places where there are lots of smart people.

Willy Walker: As I think about that, Greg, there are lots of smart people that you and I both know, but there is a certain drive to you that is unique. Where's that drive coming from?

Greg Maffei: I don't know if it's a drive. I'd like to think I have some level of energy, some level of resilience, some level of intellectual curiosity. I probably credit my parents for that and had a lot of luck because as you and I know you're mentioning all the people we know along the way who for whatever reason, things didn't turn out as they wanted and how much luck played in that.

Willy Walker: Yeah, but it's I guess to some degree it's a little bit more than luck as it relates to the move from Harvard Business School and getting to Citi Venture for instance, when you were at HBS, you got out at ‘85?

Greg Maffei: ‘86.

Willy Walker: ‘86, the industries that people were going to, venture capital didn't really exist then and private equity didn't really exist then. Some of the early media industries or the computer, the PC industry was just in its advent at that time. What did you think you wanted to do with your career?

Greg Maffei: Ha, you're making it look way more considered than it was. I had been an analyst at Dillon, Read & Co. and didn't know what I want to do, so I went back as an associate. They were kind enough to pay a lot of my business school expenses and I thought I’d continue to open up opportunities. I sold the company to Citicorp Venture Capital and looked at selling another one to them, and they asked me to join. And a lot of what Citicorp Venture Capital was doing not only venture work, but private equity. So, I got to move from being an agent to more on the principals side, and that was the appeal of that.

Willy Walker: You worked for someone named Bill Comfort, who you've said was a great mentor to you. What was unique about Bill Comfort as a dealmaker, as a leader that you learned from?

Greg Maffei: So, Bill Comfort is an Oklahoman who kind of came out and has a down home manner. On Wall Street he was probably an odd or different character when he started in the sixties and always kind of a contrarian thinker, always a guy looking for turning things over and looking for something different. Always a guy thinking a lot about different ways to manage risk. And I learned a lot about that from him. And he had a way of torturing all of us junior people to make us learn things, but it was a pretty effective manner.

Willy Walker: You went from Citi Ventures to the CFO at Microsoft. How does that happen?

Greg Maffei: There were a few steps along the way. Buyout business got kind of slow. 1991- United Airlines, for those of you who are old and wizen like me know, you kind of blew up the market was nothing was much going on. I was offered the opportunity to go out and be CFO of one of the portfolio companies for Citicorp Venture Capital, which was a home center chain called Pay ‘N Pak Stores out in Seattle. And I was 31. I thought, this is a great opportunity to go learn something. So, I went out to Seattle as CFO, they thought that that was well positioned. It turned out it was going to get run over by Home Depot and Lowe's had a lot of problems. I'd basically end up running the liquidation of that company. And while I'm out in Seattle, some mutual friend said, “You know I talked to this company, Microsoft,” and it was early ‘93, and I sort of got lucky. They had a bunch of needs around Treasury and deal making that they didn't have much experience and relatively, so I sort of was at the right place, right time.

Willy Walker: And you go into Microsoft. To me, that was clearly the right place at the right time as it relates to growth that Microsoft was experiencing. You've mentioned that working with Bill Gates was a real privilege and someone that you've obviously learned a lot from. Give us an anecdote of when you saw Gates's genius play out, like something that you were looking at a deal and everyone was saying, “Go here.” And Gates said, “we're going to go there” or not. As you and I both know, many times, the real leaders are best at what they decide not to do versus what they end up doing.

Greg Maffei: Yeah, I'm not sure I have a specific anecdote, but I'll give you some perspective. I was really lucky. He got very involved in working around cable companies and trying to think about the next generation of providing broadband access and the internet. So, I worked with him directly when I was relatively junior on a bunch of stuff and got lucky in that sense.

And the thing that was always amazing to me about Bill, where he stands out is we gather eight or ten people around a table and say, "Here's a business problem." And Bill would go, "What do you think?" Or somebody would say, "What do you think? What do you think?” Go around the table. And Bill, pretty much egoless, would say, "I came in thinking X, but really, that's a better answer." You're Bill Gates. Why do you need to win an argument? You're trying to win the world. You're trying to win the whole thing. And Bill was very good about making sure. He could be pretty tough if it was a bad answer. But if it was a good answer, he would embrace and nod and give credit, and it didn't have to be his answer. He wanted the right answer.

Willy Walker: When you think about Gates, when I think about Microsoft and their history and the incredible growth that you experienced while you were there as CFO – after Gates stepped down and Ballmer stepped in the company (for all practical purposes) kind of flatlined for a period of time. What is it about from founders to the next generation? We've seen, for instance, another example that I think about is Jack Welch with GE and then Jeff Immelt, who went to Dartmouth and Harvard Business School as well. Just like you step in and, you know, have a really difficult time, not difficult time, impossible time of replicating what it is that Jack Welch had done at GE. What was it that either Bill did, or Ballmer didn't do, if you will, from afar, because you were outside of Microsoft at that point that was so different?

Greg Maffei: Well, one of the things is clear is, as you know, Bill left (in my judgment) in large part because the antitrust trial took a lot out of him, changed the tenor. He went from being a boy wonder who created this amazing enterprise to this guy who was being portrayed as a monopolist and evil and everything. And I think that took a lot out of Bill and that took a lot out of the company. And the company was very much stalled and less innovative and more worried about how they’d be perceived and what those kinds of actions would take.

And, Steve wore a lot of that problem, maybe didn't react as quickly, but a lot of it was set up for failure in that sense or made it more difficult for Steve.

And in some ways, that's true for, I would argue for Jeff Immelt, who I knew from the Dartmouth board. You know, Jack Welch wrote it. “Jeff may have made mistakes, but a lot of it was very difficult from where the entry point was not where you wanted to start.”

Willy Walker: Particularly given how much they were focused on financial services.

Greg Maffei: They had 9/11. They had to clean up all the financial services stuff. We can argue about the mistakes they made, but it was not a great entry point. You want to come in as a CEO after things have been moribund and things to fix and you can look like you're doing the right things, not like it's been here, and you can only go down.

Willy Walker: But one of the things as I look at Liberty's holdings, you've done an exceptional job of putting great leaders into the portfolio companies that Liberty has controlled and owned. And Tom Rutledge is one example that I think of. As I think of Formula One and when you all bought Formula One, Chase Carey had been at DIRECTV, left DIRECTV, Inc. and had gone to Fox Corporation. And then when you bought Formula One, rather than going and getting someone like the current CEO, Stefano, who had been in the automobile industry at Lamborghini and had been on F1 racing with Ferrari, who would seem to be the perfect CEO of something like Formula One, you decided to go and get Chase to come in and be the CEO.

Given the success you all had from a media standpoint and what you did with Netflix to get that contract done, in hindsight, it is a genius move. But what was it? No, seriously, Greg, what was it that made you say, I need a media executive to run a sports franchise rather than going down the typical path?

Greg Maffei: So, a couple of thoughts there. One, there was so much we didn't know about Formula One when we bought it. I mean, we had the right idea that this was a great global franchise, that had been built for a long time but had stalled over the five or ten years prior to our purchase, hadn’t opened up and recognized a changed world of social media and how the media business had changed, hadn't been willing to invest in the United States, hadn't really thought about marketing and research. So, we were right about some of those ideas that this opportunity was there.

But, you know, if I probably know all the things I know, I'm not sure I would have led to Chase. But what I knew was that Chase did an unbelievably good job and we owe Chase an unbelievable debt of gratitude. I think Formula One owes, the fans owe Chase a debt of gratitude. What I knew was that Chase would be a guy who would point to the North star of the things that we needed. And really the most important thing was getting the teams on board for a new Concorde agreement.

Having an outsider who had credibility, who was implacable, thoughtful, built great relations and just kept pushing towards that North Star of getting the Concorde Agreement done. Chase was the right person absolutely for that. And Chase did an amazing job.

And we knew Chase's history. We'd been with him, we controlled DIRECTV when he ran it. He'd gone back to work for Rupert, and I had told him for several years: “Chase, I got your next job” because we knew we were working on Formula One, and he would just roll his eyes at me and say, “Right, what do I know about motor sports?” And I said: “Well, what we need is a guy who's going to set the right tone and the right direction.” And we ended up hiring several people, including Ross Brawn and Sean Bratches, who helped him dramatically. Ross in particular knew a lot about motor sports, but really Chase was able to point out that North Star was the absolute critical difference decision.

Willy Walker: You say that you were working on Formula One for a couple of years. I've read that John Malone said to you that when you invest in sports franchises, it's like taking cocaine because you get addicted to it and you can't get away from it. And then when you got Formula One, you turned to him and said, “We've gone from being the user to being the dealer.” Talk about why Formula One is distinct from just the cocaine of being in the sports industry.

Greg Maffei: Liberty and John Malone from TCI, our history has been a lot of times in the distribution business, owning DIRECTV, owning TCI, now being in Charter. So, you're always paying for sports rights. And you know, your consumers, your subscribers want those sports rights, but they're expensive and a lot of leverage goes to the sports team. And then in turn, a lot of sports teams are paying out much of that to the underlying players and the unions are fighting. So, there's lots of tension around. A lot of sports teams don't make money.

This was really the perfect anecdote where we were going to be somebody who wasn't just consuming sports rights, but actually generating sports rights, being able to use that with distributors, being able to build a great business out of that and yet still make money by owning the league. So, it really was a great combination. And we were kidding about how for the guys for the longest time we were being paying for sports rights, we were going to get paid and be pretty happy about that.

Willy Walker: In Formula One, there are ten teams.

Greg Maffei: Yeah.

Willy Walker: One of the things I thought was interesting that I heard you say was just that to expand the number of teams isn't just a matter of saying we're going to have an 11th or 12th team out there, but that in many instances that the actual tracks don't have the paddock space to be able to add additional teams down in there. You're building your own track in Las Vegas. Does the new track have a paddock space that could take on the expansion of F1 if you were going to add new teams?

Greg Maffei: Yes, we have accommodated and that will not be a problem at Vegas. The real problem is, you know, the way the structure works today, there are probably, as I said, four or five garages, paddock areas that would be difficult to put in an 11th bay. Maybe that's solvable with money and time, but it's not something you snap your fingers and solve. The other issue is, is that the ten teams are splitting the profits that go to the teams and dividing it 11 ways is not something they're particularly enthused about. There is a mechanism where there's a franchise fee where a new entrant would pay.

Willy Walker: You put them in place last year.

Greg Maffei: We put that in place with the new Concorde Agreement. And frankly, that was a huge change because historically there was no such thing as a franchise fee. In fact, the teams were not franchises. F1 had the right to add with the consent of the FIA, the regulator, to add new teams as many as we wanted, but we really wanted to create value in those franchises. We want to make the teams worth money so that people would invest and hopefully create parity on the track. And now the teams are looking at saying, well, wait a minute, we don't want to divide 11 ways. We are very happy. And whatever is being proposed to pay for a franchise fee doesn't compensate them enough for the dilution that they're going to take for the 11th team.

So I think in the right set of circumstances, we would work to get the 11th team, somebody who could bring a lot of value to the sport, a lot of value to the fans because of their position in technology, their position as an OEM, their position in marketing, some combination of all that you could imagine coming to some kind of an agreement. But it's not without controversy, certainly among the ten teams.

Willy Walker: A US manufacturer on the outside of sports going on the inside of Red Bull. But a US manufacturer on the outside or a US driver/pilot, I would assume, first of all these drivers start driving cart when they're three years old and we don't have in the United States the same sort of “farm system,” if you will, to create these drivers that Europe does.

Greg Maffei: Certainly not the same degree. There are Americans who do it. But, you know, as you rightly point out, the number in Europe is multiples of the U.S. number.

Willy Walker: And so, I mean, you have to have done number studies on it, though. Having a U.S. OEM is one on the outside or a U.S. driver, it just would attract huge eyeballs.

Greg Maffei: Yeah. So, a couple of things. First, we have a U.S. driver, Logan Sargeant, who drives for Williams. Seems able, Williams has not been the fastest team. So, there's a learning process. And whether Williams would get up to speed and make him as competitive as Williams would like and we would like, we'll see.

Secondly, you rightly point out, Ford has invested in the Red Bull engine process, and it's not inconceivable Ford could get a bigger role. There was certainly talk that General Motors was interested around the Andretti bid for an 11th team. And I think there's reason to think that that could come about. You know, we've had other OEMs who could be very interesting as well. Just to be clear, Porsche tried very hard to enter with Red Bull. BMW used to be in the sport and left in ‘09. So, I think OEMs, we're lucky we have so many OEMs now, as many as we've ever had, but having more OEMs and particularly an American one would certainly be a positive.

Willy Walker: The Formula One circuit, Greg, when I think about moving a circus and what Barnum and Bailey has to do with all the animals, I think about moving F1 and it is, and you told me once that you all take on the responsibility to move this around the globe. And one of the places that you've talked about, the only continent you're not on right now is Africa. You add somewhere like Johannesburg to it. I mean, just the distances and the logistics of doing all this is just an incredible undertaking. You don't just say, let's go to Johannesburg. I mean, it's tens of millions of dollars to invest as far as the infrastructure, the transport, and then also fitting it into a schedule right now.

Somebody once said to me on an airplane, it was a traveling salesman I met him on a plane, and he said: “My travel schedule is the PGA golf tour. And I kind of looked at him strangely. I said, “What do you mean?” He said, “The PGA follows the good weather. So, I do all my trips to Arizona in January and February, and then I move through, and I stay out, Florida come summertime.” And you have to be very careful as it relates to both the drivers doing these distances. But how do you expand and add more races?

Greg Maffei: So, lots of questions.

Willy Walker: I know. I realize that.

Greg Maffei: Let's start with we think it would be great to go to South Africa. There is a track outside of Johannesburg called Kyalami. We have been working with local authorities and a promoter to try and make that happen. Haven't been able to yet, but we'll see if we can get it done.

Putting the calendar together, as you rightly point out, is an enormous task and there's always the potential for movement. But we lock that down usually sometime in the summer and it gets approved by the FIA. Our regulator approves it with us and gets announced and we're trying to balance a whole bunch of things. You're right. We're balancing wear and tear on the drivers. We're balancing you know; you're not going to have a race in a cold weather climate in November. You're going to try and do those in warmer places. You're not going to have the opposite. We worry how warm is it, where we run it in Miami? You know, we would love to have them. So, they're all contiguous because one of the important things is sustainability. And Formula One has a very aggressive program to improve sustainability and be carbon neutral by 2030. And we've done a lot to reduce our carbon footprint, generally reducing what we produce. But obviously, tightening the distance between tracks we travel to is an important part of that. As you rightly know, we move all of the cars, all of the infrastructure, the garages, all of the hospitality – that gets moved by us centrally makes a lot more sense than trying ten teams to move themselves. We do it all.

Willy Walker: Is DHL your partner in that?

Greg Maffei: DHL is our partner. It's an important part of our role as F1, but there really is a careful balance and there is always the potential that something drops out. This year because of COVID, China dropped out. This year because of the floods, sadly, and there were several deaths - Imola had to drop out. And it's almost impossible to replace a race unless you have months of notice. To your point, what has to happen? There are places which would love to have another race, but the cost, expense, the logistics of just saying I'm going to replace China with Portimao in Portugal, which would love to have it and move everybody across is very hard. So, it's an intricate dance of putting the calendar together.

Willy Walker: You talked about the franchise, which is implemented in the new agreement. There were two other changes there that I thought were interesting. One was you put a cap on how much people were spending and then you made design changes to make it so that the backdraft, if you will, behind the cars was making so that you could pass easier. And it all seemed that that was going to level the playing field. And then all of a sudden we come into this season Max Verstappen has basically been having a run. Very much Lewis Hamilton-esque in Mercedes days. What I guess is, is Max just that great a driver or is there something that Red Bull is doing that this kind of leveling the playing field actually hasn't done what you intended it to do?

Greg Maffei: So, a couple of thoughts on that. First: Yeah, When we put the new Concorde Agreement, as you rightly point out, we made the teams franchises, we made a cost cap, which goes to the cost of the chassis. It doesn't go to driver costs or executives or marketing, but it was an attempt to try and create more parity. We had some design changes which, as you rightly pointed out, these cars create massive downforce, which is almost like flying a plane upside down there gripping the track. The negative of that is they throw off a lot of bad air. We've done things to reduce that.

And while Max is upfront (and I'll talk about that in one second,) we can show you statistically there is actually way more overtaking going on in the midfield over historical numbers. We can show you how many overtakes there were. I think there were 77 not in Montreal, but the week before in Spain, which is a big number. We track this. We are trying to create an interesting product for our fans obviously.

Formula One has had a long time when teams and cars had a run. You go back, Red Bull have won four in a row and Mercedes won eight in a row, seven with Lewis, one with Nico Rosberg, and now we're on. Looks like we may have a third for a Red Bull. So, it's not unusual. I think it takes a while for teams to catch up to some of these new regulations. We'll see what happens. We can hope.

Willy Walker: And then on Max, you know personally the two (I'll be careful here because plenty of people think that Senna is in this group.) But two of the greatest drivers of all time, Lewis Hamilton, and Max Verstappen.

Greg Maffei: And Sebastian Vettel, who if you look at the tenure, we've had three of the greatest drivers in history.

Willy Walker: And is there something about either their focused personality, athleticism that can say to you they're somewhat different? I mean, you meet someone like Michael Jordan who, by the way, was in Florida, you tweeted out a great tweet that said: “#MichaelJordan #TomBrady #DavidBeckham Where else can you find those three people but in the Mercedes garage right before the Florida F1!” Which to the point that Malone had said, once you start doing sports, it sort of played crack cocaine. I can see how this is very alluring.

Greg Maffei: Well, I would say it's alluring for the fans.

Willy Walker: It's very alluring for the fans, but it's also fun as an owner.

Greg Maffei: There are worse businesses to be in. When they are working.

Willy Walker: But talk for a moment about that: is there anything of the approach, the way that they carry themselves that says these guys are just cut from a different cloth?

Greg Maffei: Well, it's clear Max is an incredibly focused individual, aggressive, smart, capable, training all the time, thinking all the time. And Lewis is too, great skills. It's always very tough to know how much is the car in Formula One. How much is the team? Because it's a team. Now, there are a huge amount of resources backing up their strategic decisions about tire changes and lots of other things that are the team and tire choices. And then how much is the driver? Weighing all that is hard. But clearly we're blessed to have in the era where Liberty's been involved three of the greatest of all time.

Willy Walker: And it's interesting because when you talk about those things, Greg, we as the outside public now actually have a sense of all those things. You talk about giving Drive to Survive and the Netflix series on that. Without that, does everything that's happened happen? I mean, how much of a catalyst was that to the transformation? Because you now have three races in the United States, which previously you only had Austin. When you took it over, Austin had 80,000 people coming out on a weekend?

Greg Maffei: Probably a little earlier, probably a little before we took it over. They may have grown by the time we got there a little bit.

Willy Walker: Was Netflix the catalyst that made it so that all of a sudden F1 went from being a global sport to being a U.S. sport?

Greg Maffei: Well, a couple of things. I think I started by saying, in life you hope you do the right thing but there's a huge amount of luck involved, too.

My other claim to credit, perhaps besides hiring Chase, was helping hire Sean Bratches with Chase. Sean came from ESPN and Sean, probably more than any other person, was the person who said the story needs to be about the drivers, not about the cars.

The late Sergio Marchionne who ran Fiat and Ferrari, used to think, “My car is the star.” And from his ESPN background, Sean understood that telling the story of the drivers, which was compelling. These handsome young guys who had lots of competitive issues internally against each other, thinking about the car and all the team stuff, there was a great narrative here and it was going to be a compelling narrative for our fans. And he was really the one who went to Netflix. The line says: “Success has many fathers,” but Sean is probably the true father, went to Netflix with the idea drove it and as I said, you can work hard, you can be thoughtful. And this was absolutely working hard and being thoughtful on the right idea. But we got lucky, that Box To Box Films and Netflix did such a great job.

That having been said, there are many other elements opening up and telling that story that were important - fan festivals that didn't exist. You know, driving the cars around Trafalgar Square and doing donuts. Opening up social media. The prior management would not let the drivers tweet, would not let them be on Instagram, believing that would reduce the appeal for our broadcast partners because we were giving away products. We flipped that on its head. And now, Lewis Hamilton has twice as many Instagram followers, three times as many as Tom Brady. We opened that world up and Netflix, you know, you can go race drivers on Twitch and race them in video games. So, changing the perspective of which Netflix was an important part but not the only part and opening that story up to our fans was a huge part of what made the difference.

Willy Walker: You bought Formula One for $4.5B?

Greg Maffei: $8B of enterprise value, $4.2B of equity.

Willy Walker: That’s now $17B? There's been speculation that the Saudis made you a big offer to buy it and your comment was given our tax basis in it, that we're not interested. But when I read that, Greg, I sat there and said, well, your tax basis is always going to be your tax basis. You own it. And this is going to now take us back to Liberty. Is Liberty a PE firm? Is it a conglomerate or is it a holding company? Which I want to go to next. We've got to have a low tax basis. The idea that we'd sit there and pay cap gains on all that doesn't make much sense to us. But then that just means that you’ll never sell it?

Greg Maffei: Well, one of the things is you say, are we a PE firm or we're not. We're a C Corp. And this is, perhaps, more arcane than some would want to listen to. We're a C Corp, meaning if we sell a division, we pay corporate level tax, and then any proceeds we would pay to get distributed to our shareholders, they would, in addition, pay tax. If we were to spin Formula One away, create a separate company, wait a sufficient time, have no plan or intent to sell - that asset could be sold down the road and there would be no corporate level tax. So, what I really was saying is the way we're structured today, given that low tax basis, we would not be sellers. If we wish to be sellers or even consider it, you'd need to do a spin. Spinning it away, there are other reasons why we might do that. It's not just to do a sale, but the way we are structured that would be very unattractive. The other point I've made is first and I've said this publicly before, the Saudis have been partners on a couple of things. They have a race there. Aramco is a sponsor, but they never approached us. And frankly, $20 billion would not be an attractive price. I wouldn't, you know, trade for $17, $18. Well, why $20? I would want to have a lot more than that. And we think we're pretty bullish on the future.

Willy Walker: So, you own in baseball, you own F1. Are you going to buy other sports franchises, you can go by the Premiership, which I mean, you now have done so much with this and created such a brand in F1 that my assumption would be (and we watch what's happened with the PGA Tour and with golf, I think we wouldn’t need to really dive into that.) But there's lots that's open to you. But at the same time, Liberty's history is to buy on the cheap and then build value, not buy at the premium price.

Greg Maffei: I would dispute exactly “buying on the cheap.” We'd like to buy for a fair price and hopefully build value.

Willy Walker: Okay, so look, $400 million debt investment in Sirius XM that is turned into billions of dollars of equity values. Definitely buying on the cheap.

Greg Maffei: That was lucky. Look, a couple of thoughts. Credit the teams at Formula One and the teams at the Braves because we haven't really talked about the Braves, but I believe we have the best management team in baseball there. Creating both a great on field product. Alex Anthopoulos, our GM, at a reasonable price with a long-term future with young players that are well set up on contracts, but also the team. Derek Schiller, Mike Plant, obviously Terry McGuirk as the CEO have done a great job on the business side as well and building out Truist, the whole Battery, or development around that.

Willy Walker: Truist is the field for those. There's also a bank that your team sponsors.

Greg Maffei: They're the sponsors for us. I think the demonstrated expertise, the demonstrated success of Formula One. We now, credit them, a reputation in sports and others we have talked to have been interested in seeing if we can help them and replicate that. And you mentioned premier teams, Premier League teams. You know, there isn’t an asset that goes by that we haven't looked at. That doesn't mean we've been ready to buy them all. But we look at everything because we do think that sports in general are attractive. We do think there's upside and we do think there are things that those management teams have taught us. So, we've learned that we can help apply perhaps in other sport situations.

Willy Walker: Your comment about the Braves and the real estate play and how valuable that's been. The Battery, which is the whole area outside of Truist field, as I've told you, we have the loan on the apartment building there, which is owned by Cortland Partners, a very large client of Walker & Dunlop. And I was talking to Steven DeFrancis, who runs Cortland. And his comment was to me, the walking mall that you've created there has been too successful in the sense that residents move into The Battery and they're thinking, I'm going to be at main and main and have a lot of activity around here. But it's so much that after they've been there for 6 to 9 months, they're just like, “Man, I'm living on Bourbon Street every single day. And I got to go live somewhere else where I'm not downstairs all the time,” which is interesting. I mean, it's almost been a product of some success. All that's done for them is it's full all the time. It's just that their churn of the units is actually higher than, if you will, pro forma.

Greg Maffei: So, what's amazing is, you know, baseball is 162 games, 81 home games. The Battery, to your point, is busy. A hell of a lot of nights when there are no games. And this may not be right post-COVID, but I knew the stats pre-COVID and there's no reason to think it's changed. Of the ten highest grossing restaurants in the Atlanta area, three are at the Battery. Well, they built a juggernaut. They're hugely successful. And it's helped create part of the interplay between the team is an exciting team. There's an exciting onfield product, but it's a great entertainment experience. It's a great dining experience. It's a great experience and people go and hang out. And that really has been highly synergistic.

Willy Walker: So, as we think about Liberty and the various portfolio companies, the draw down there seem to be two broad categories. One is audio and the other one is sports. On the audio side, Greg, I've heard you say numerous times that you're not a fan of scripted content. Explain why Liberty has stayed away from the scripted content area and focus so much on audio and music.

Greg Maffei: Yeah, so for your viewers and listeners, when I said scripted content, I know you meant it was really video content and there has been a war in video content. We used to be a player as a producer/distributor owning Starz, and we sold that five or six years ago in the belief that that business was going to get a lot harder. And I would argue it has. You know, Netflix, Disney, Warner Brothers. There are a lot of huge companies competing there. Not all of them are making the money they hope. The winner here has been the consumer. There's 600 new shows produced a year. The cost of production over the last five or seven years has probably gone up three times cost per hour. There's just a plethora of content. And that makes it hard to make money. And you've gone from a world of the cable networks, which were bundled and had relatively low churn, to a world of streaming where high expense in making content, high expense in marketing that content, and then really easy for people to disconnect so that the churn rates are very high, and you don't have the sustainability of a customer or a subscriber that you would like. We didn't find that attractive. There were a lot of, as I said, big players, and we weren't going to be one of them and have stayed away.

Willy Walker: If you think about the assets that you own on the audio side, you've got SiriusXM inside of that, you've got Pandora. You've got a very significant stake in Live Nation, which also has Ticketmaster. You're at a point now where if you were to have, for instance, an agency like Endeavor, where you were to have a label, you basically have from kind of cradle to grave, the ability to find talent, promote that talent, put on both recorded as well as live entertainment access to them, promotion of them. It's amazing the stack that you built up in that and you're clearly getting leverage across them. Talk for a moment about the users of SiriusXM, which I think is people like you and me, the users of Pandora, which clearly isn’t our kids, it is someone between you and me and our kids. And then some of the other ones out there today that are capturing that younger demographic and how you all are investing in either the older demographic, which is sticky and high margin versus Pandora, which is that next demographic, because the numbers are quite something. I think you've got 35 million SiriusXM subscribers and then there's something like almost 70 million Pandora users. And so, I thought it was interesting. You've got 2X the number of Pandora users more than you do SiriusXM but they're also both subscription businesses as well.

Greg Maffei: Live Nation is a separate company from SiriusXM and runs its own business and Michael Rapino is on the Sirius board, but he runs his company and Jennifer Witz runs SiriusXM, and there are some places they operate together, but they really are independent companies. They're both at what I think are the most attractive parts of the business. Touring has grown enormously. You know, the long-term decline of records into CDs, into just purchasing music became renting music through streaming services. And that's meant that touring has had a lot more value. And most of the great big acts make the bulk of their money off touring. And that business has exploded.

Moving over to the other side, when you think about even streaming music has some of the challenges that we've talked about with churn. We've talked about with scripted content. The most attractive element we love about SiriusXM is its relatively high ARPU. We're not just relying on music, ARPU is average revenue per user per month. We're not just relying on music; we're relying on all of the different kinds of content that we have and differentiate and provide. Howard Stern, CNBC, ESPN, NFL, MLB, a host of kinds of content as well as really for older audiences like us, you know, lean back content. I love Channel 23, The Grateful Dead. You might be 56 The Highway. People love that, you know, being having that music chosen for them and that lean back experience. So, there's a variety of content.

The subscription business for either the ad based one for streaming or the subscription one those are still more competitive. And Pandora is in a tougher part of the market up against Spotify and Amazon and Apple music. So, you know, wide, wide range across the portfolio.

Willy Walker: When you mentioned Howard Stern, Greg, I think about the movie Air and what Nike and Phil Knight did to sign that contract with Michael Jordan and how much of a leap of faith they had to make. And obviously it paid out handsomely. You and I are constantly, as CEOs, presented with a decision to either break a business model or stick within the business model. When we hire bankers and brokers at Walker & Dunlop, I may pay someone a lot more money than someone else, but I try to keep the general parameters of the contracting the same, because the moment I go and break someone's contract, someone else comes in and asks for the same thing.

And I thought it was fascinating in that movie how they went and gave Michael Jordan a revenue share. You've been very successful at keeping Howard Stern on Sirius, and my understanding of it has just been that having Howard there as this marquee figure has been extremely valuable to the brand.

In all of the various businesses you own, you've been noteworthy at identifying great talent and saying basically we will pay that talent as much as we need to keep that in there. Am I right that Howard Stern has just been a franchise player for Sirius?

Greg Maffei: Absolutely, Howard has. And Howard is so critical now. But think about how critical Howard was when we were starting and really merging for Sirius and SiriusXM together and bringing that power. When we were involved in 2009. And Howard, you know, predates that obviously. But we got involved in 2009, we had 18 million subscribers. Today we're 35 million. And you know, he was that much more important when we first started, he's still so critical and he has changed and morphed himself from being, the shock jock into really so much the arbiter of how to do an interview. What's the taste out there. And Howard is well paid, and he deserves it because he sets the tone. There are clearly millions of subscribers who are there because of Howard. And we've worked hard to create an environment that Howard will operate in and that he enjoys. So, it's worked well for both of us.

Willy Walker: Let's talk about direct sales and QVC and Home Shopping Network, predominantly cable distribution, although online has grown a very, the demographic is 90% female?

Greg Maffei: 90-95 % female.

Willy Walker: But that business is basically flat, declining?

Greg Maffei: A couple of things. Tied to as a promotion vehicle television. So, as we've gone from a world of 105 million cable households down to 75, that's been an enormous headwind. More recently, an enormous headwind around some degree changes in the consumer economy. But also, a warehouse fire we had about 18 months ago in our largest warehouse. That was a massive disruption not only to the goods there but returns and shipping times to customers and being able to put product on that they wanted. So, lots of challenges we've gone through in that business. Just to note, the business today is a lot of online, but what happens is it gets promoted across the television that people execute to the Internet and that will continue to grow and the Internet will be an enormous source of our strength, not only as an execution arm, but really as another means to promote and to bring video, which we're very good at to customers in new ways.

Willy Walker: In the first line of the bio, I read at the top, it says, you're leading Liberty into the mobile media world. As I think about your stake in Charter, the investment in Charter has been incredibly successful and valuable to Liberty. And yet at the same time, people seem to be, if you will, clipping the line. And you just talked about the number of cable subscribers coming down.

What's that mix going forward as it relates to, you know, the ability to either convert the cable infrastructure into something that allows you to do back hauling and use the incredible data capabilities of cable networks. And at the same time, the future is clearly mobile. And, you know, as I was out on my bike this morning getting ready for this, I literally downloaded my notes and put them on my computer as I sat there on my bike computer to think through the things I want to talk to you about. And I sat there and said to myself, “This is about as mobile as you can get being on a bicycle, reading notes for an interview.”

Greg Maffei: Right. Couple of thoughts. First, you know, the strength of cable companies is the infrastructure that they built out in the United States. And historically, that began by providing video. And frankly, it wasn't even a cable network it was providing where people couldn't get it, the general networks. Cable networks came in over time, created a new arm and a new growth in the revenue stream. And if you look over the last 15-20 years, the real growth has not been in video. It has been in broadband, high-speed data, and providing broadband access. And that is a much higher margin business. The video business, because of the rising costs of programming, including sports programming, as we talked about earlier, that margin has declined.

So, video as a percent for all of these cable companies is people are cord cutting and the cost to provide it has gone up in terms of the content. So that is a much smaller part of the business today. The big earner has been high speed data, but the new arm to hit the mobile point is growth in providing mobile services. And we have what's called an MVNO, a mobile virtual network operator partnership with Verizon and where really the last mile is provided by Verizon. But 85, 87, 89% of the traffic is running over our pipes. And that's caused enormous growth as we bundle that mobile offering, Spectrum One, with our high-speed data product, we added 688,000 lines in the first quarter, which was if you take Comcast and us, we were more than half the market growth. So, the next generation opportunity or the current generation opportunity that will be the next generation of growth is really in mobile for these cable companies and Charter in particular.

Willy Walker: So, your outlook for cable is still quite positive?

Greg Maffei: I think cable is well positioned, yes.

Willy Walker: It's great. As we think about AI and the advent of AI and how it is going to transform our world. It made me think a little bit about TripAdvisor, and the reason it made me think about TripAdvisor was Google changed their algorithm to make it so that Google owned travel advisory services were put up top and then paid was below that and TripAdvisor kind of fell down below. And you and the team are working to change that after the algorithm changes. But it made me think about AI, Greg, in the fact that those who control the AI algorithms are going to have a huge ability to control.

I mean, you do a search on top real estate services firm and all of a sudden, you know, W&D either makes it in there or CB is perfectly put in that little paragraph that comes out “Plan My Trip to Europe” and all of a sudden you must stay at the George V rather than somewhere else comes into it. How are you thinking about the future of AI and making sure that the products and services that Liberty owns are, if you will, at the top of the search?

Greg Maffei: So, I think AI potentially a threat for many businesses, but I actually think it is a real opportunity for TripAdvisor. So much of what we have and it's interesting because now the algorithms you mentioned, you know, there are a lot of open-source algorithms. There's a lot. In many cases, what really matters is the data you have the large language model, and we have an enormous amount of data supplied to us through these reviews. The information we receive from people who write those about, “Hey, it's not just, you know, the George V, I’m a biker.” I know you're a biker, Willy. And what's the best place if you're going to be a biker that has storage that will let me store my bike, is the closest place to get to a track? Finding the nuances of what is your experience and having the large language model that, hey, somebody told us that, yeah, that is the best place to bike and or that it does have racks or that will let you rent a bike. So, it's the nuanced information that we can provide to travelers that I think is going to be very powerful.

Willy Walker: Interesting. And looking at any other investments in the AI space that seems a little bit out of the audio/sports focus of Liberty. But I'm just, I mean, you get access to so much and you see so many opportunities.

Greg Maffei: Look, I know I've had a dialogue with Alex Anthopoulos, our GM, at the Braves, about AI and how we're using it at the Braves. TripAdvisor is very focused on using AI. Charter's got a session, the next upcoming board meeting about how they're going to be using AI mostly around consumer interactions, but there isn't a business that's not going to be impacted. There are businesses that have already been enormously impacted. I've been using it for a while. It's just now caught the common conscience and so much of the customer facing is changed.

Willy Walker: Finally on a company that you're a board member on Zillow, one of the things I heard you say that I thought was quite interesting in this whole mobile versus tethered search, you'd think that Zillow mobile searches for homes would be off the charts. And at the same time, I heard you say that using the mortgage product is also more used online than it is sitting at your desktop. As someone who sells mortgages, not single-family mortgages. But that was counterintuitive to me, that people would be sitting there looking at a house and also at the same time checking out their mortgage terms of what they're going to buy.

Greg Maffei: My old boss, Bill Gates said “software eats the world;” “mobile eats the world.” People's willingness to do everything on that mobile device is amazing. And yes, people look for mortgages on their mobile phone. And that's very common. And I think, you probably see cases where people are driving around, see a home, look it up on Zillow, figure out what they would cost, figure out what the mortgage would be, literally the real time. And that kind of interaction has changed the world.

Willy Walker: So, mortgage costs have gone up precipitously and single-family home sales have come down given affordability issues. Your outlook for the economy from here and what do you think Jerome Powell is up to as it relates to rates? I mean, just take it from the Liberty view to the broader Greg Maffei view of where's the market going.

Greg Maffei: Well, I certainly don't have any particularly great insights on that. I was listening to it before we got on this morning. I was listening to Jay Powell testifying in the House. I'm lucky Jay Powell and I used to work together 35 years ago, so he's a friend. And so, I listened with interest. Hard problem. How do you balance and what's really happened to inflation and when's it done? And obviously the tension on trying to create the soft landing, not blow up the economy. Not an easy challenge.

Looking at the real estate side, I know the percentage of people who can move without getting a lower priced mortgage is something like what, 1 to 5%, depending on how you count it. So, it's obviously a huge deterrent to that business. I do think you will see some weakness in housing prices. I look at places I don't know if you've seen what's happened in New Zealand where prices have absolutely crashed, they're down like something like 18% on average. I don't think we're going to have that kind of a number, but I do think you'll see some decline in that.

Willy Walker: And but generally speaking, in all of your other businesses, the consumer is as strong as ever. Formula One's sold out, people are signing up for Sirius subscriptions. I mean, are you seeing consumer strength?

Greg Maffei: So, I would say high end consumers remain spending, and that's what we see. So, for discretionary income, Formula One is discretionary income. The Atlanta Braves, a lot of discretionary income.

Willy Walker: But you purposely tried to keep your ticket prices low?

Greg Maffei: The Braves is a pretty reasonable, certainly in the middle of where baseball is. Demand is very high. We have the highest yield of any stadium meaning we're well sought after I think is 94% sold out last year. We were fourth, over 39,000 fans per game, very popular, but we have not chased the last dollar in ticket prices. The strength in live entertainment, I just can say Live Nation, that part's very strong. You know, much more weakness you see consumers are on QVC and purchasing goods rather than services. That's not you know, that doesn't have the same tailwind that we've seen around these experiences around the higher end consumers.

Willy Walker: Finally, first of all, thank you for all your time. I want to know, have you ever done a hot lap in a Formula One car, or have you gotten in that track car like the Mercedes with Lewis Hamilton? There was a really fun David Letterman interview with Lewis Hamilton, and he threw them in the car and just had the GoPro on David Letterman. It's just hysterical to watch Letterman's face. But have you ever driven a Formula One car and have you ever done a hot lap with one of these drivers?

Greg Maffei: So, they will not let me get in a Formula One car. But I have been in a Ferrari 468, which is just below a two-seater, and you walk up, you don't know the driver. So, somebody who's been either a Formula One driver or nearly a Formula One driver, you don't know the car and you don't know the track. And 5 seconds later you're going 150 miles an hour, up to 175. You come into a turn, and you get down to 40. And the difference between this car and Formula One cars, they break at 200 meters rather than 100 meters. But it's still jarring and it's unbelievable. It's an amazing experience. They first build it up and hype you and say, “Greg, you may not want to do this on a day where you have meetings in the afternoon.” It is amazing. It was not traumatic, but it is dramatic and very cool.

I have driven a car similar to that. And we did announce Las Vegas last November. We had a bunch of drivers. They first had me with Stefanos, my passenger drive as a pace car around the place, and I wasn't doing donuts, but we did some pace and I think Stefano was more scared than he would possibly let on that I was going to kind of wreck us both, but it was a lot of fun.

Willy Walker: But they won't let you get in an actual car?

Greg Maffei: I'm not that big. I'm not sure I could fit. I might get in, getting out of these things. You've got to be really quite petite, and they will not let me drive those cars.

Willy Walker: Greg, thank you. It's been a real pleasure.

Greg Maffei: Thank you for the listening audience, the viewing audience.

Willy Walker: Been fantastic. Thanks, everyone, for joining us. It is the summer solstice, so enjoy every minute of today. And thanks again, Greg.

Greg Maffei: Thanks Willy.

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