QVC Group Inc. (QVCAQ) Earnings Call Transcript & Summary

Good afternoon, everybody. Thank you for joining us for the 8th Annual Moffett Nathanson Media & Communications Summit. I am really delighted to welcome back Greg Maffei. Greg has -- yes, I think you've been with us probably 4 times. And Greg, if I were going to try to read your title list here, we'd run out of time. So I'm not going to, I'm just going to say Greg is the CEO of a whole bunch of companies that have Liberty at the beginning of the name.

And so Greg, with that, let's start with a couple of broad questions because a lot has changed since the last time we had you at the summit. Can you just reflect on what you've learned across your portfolio of businesses over the last year and what do you expect to see as the economy reopens? I mean you've got this range of companies in your portfolio from kind of lockdown winners like Charter and the reopening darlings like Live Nation. Sort of what do you think is coming?

Well, first, Craig, thanks for having me. I guess I'm only worthy of every other year, so now I know my [indiscernible]

I think you said no last year, was there problem?

No. There's no way I would ever say no to you, Craig. And thank you to the listening audience. Look, we -- what do we learn? If we were here 18 months ago, we would have thought Live Nation just had a huge head of steam. And then if we were here 9 months ago, we were worried about would there ever be concerts again, and now we're seeing the supply side of artists who want to tour and the demand side of consumers who want to shop and go to live events explode. So I think what you learn is don't be too certain about any one thing, and stay flexible and stay strong. Clearly, being big -- bigger has been a good thing. You did not want to be small, you definitely wanted to be digital if you could, but you definitely didn't want to be small because access to capital was critical. And so even companies like TripAdvisor or Live Nation who have had massive declines in revenue, 97%, 95% down quarters, scale has certainly helped. We are -- you have a range, you have winners and losers, there's no doubt. And we have had people like Charter and certainly, even surprised things like Qurate, which looked like they had headwinds with cord cutting have had big tailwinds through a lot of this cycle. And as you rightly pointed out, we had Live Nation go from $77 pre-pandemic to $25 to back over $90 and then back off and it's in the low 80s now. But I mean, huge volatility, and you've just got to be able to prepare to ride it through because conditions change.

So you talked about access to capital. We're going to talk a lot about Charter today, but I actually want to start with a capital story with your SPAC, Liberty Media Acquisition Corp., because I think it's a really interesting window into a bunch of broader topics. You introduced it back in November, raised $600 million almost. I think it was the biggest SPAC. It's still the largest maybe to date. And I think you said at the time that it was going to be used for beaten down opportunities as a result of COVID. Are there still any beaten down opportunities as a result of COVID? Is that even an idea anymore?

Well, I think a couple of things. First, our SPAC, you're kind of -- it's the largest corporate SPAC and...

Yes, sorry. The largest corporate SPAC.

No, no, just to make sure nobody -- there are some bigger ones out there. I think $4 billion for Bill Ackman's SPAC was the large one. But -- and we will take pride, at least the underwriters tell us and maybe they're biased, who had the most amount of demand that was 20x oversubscribed and had the largest trade up because we price just about -- not quite at the top, but in January when the market was on fire. And our hope, our dream was maybe we would find things in fast growth industries that we didn't necessarily fit our portfolio to be merged into some of our existing ones or we would find opportunities, as you say, in beaten down COVID opportunities. The market has given a lot of credit to reopening, to your point, I think about that there may not be as many discounts. But there are still a lot of companies which need a lot of capital to survive COVID and go through the other side. And the SPAC market has gone from being ridiculously hot in the late fall to pretty darn hot when we priced in January to very cold now with pipes revaluing initial indications and very difficult time to get pipes done and many even successful serial SPACers having their companies trade below $10 and having risk of redemptions. And all these things have gone on. So I think our belief that having -- we'd like to think a good long track record having a great growth of investor -- great excuse me, group of investors who have come in and who want to participate not only in the SPAC, but the pipe, give us an opportunity to go out into this market where things are far more difficult and far less suspension of disbelief has gone to only disbelief and being able to provide capital where companies still need -- and SPACs do have an opportunity in many cases that IPO is done, the economic capital, the ability to tell a longer story, there is a role here.

So broadening out from the SPAC though, I think of you and John as value investors and...

Somebody else described this as GARP, and I don't think that's probably -- I'd like to think it's a little more GARPy than just value.

Okay. So GARP investors. But do you and John think that the market isn't -- that this is a bubble? Or do you see valuations, broadly speaking, as excessive? Or do you think that it's just -- there are some overvaluations, but there are still some pockets of real value?

Look, there are clearly overvaluations, and you've seen, I mean, serious revaluations already of some companies that were absolute darlings, whether they've sufficiently dropped, the market does tend to overshoot, as you know better than I, Craig to both sides, the up and the down, and maybe that creates opportunity. But there are also pockets of value. And again, I lead with, if you need to raise a quantum of capital, the IPO market may not be the place and the SPAC market is not what it was 4 and 6 months ago, so there may be -- we still think there are going to be specific opportunities for us.

Where do you and John come out on inflation? And what are you telling your portfolio companies to expect with respect to inflation?

First of all, we try not to tell our portfolio companies anything. No, it's not quite [ Buffett ] ask, but we think they're pretty smart about how to run their businesses. Once in a while, we might give them a little cross insights from what we're seeing in other companies, but we were lucky to have a great and strong group of CEOs, and I hope it's not quite as much telling them as adding hopefully value by what we see. But the -- clearly, we're seeing inflation. I -- no new news about what -- the numbers that came out this morning, but you can see it in some of the businesses we operate, SiriusXM, what happened to used car prices? I'm on the Zillow Board, what's going on with housing? I mean you can see it many things, but many other kinds of things, like I read about the amount of speculative corn supplies. I don't know much about the corn market, but I guess there's the modest amount of speculation about inflation in the corn market. So you're seeing that in a lot of places, and you're clearly seeing the market have questions about it. So we see it both in our companies. We see it in other things, and we see it in the market's estimates.

So I want to turn to Charter now. You were joking. It was the year before last is when you were here. You missed the COVID year. But when you were here 2 years ago, Charter was trading at $386 on the day you were on stage. Today, it hit $700 earlier this week, and now it's $680 or something like that. I wonder if you could just reflect on the ride that you've had with Charter and where you see it today, sort of how do you think of it? Where is it in its life cycle?

First, we've had a great ride. We invested at $105 and then the subsequent investment at the time of the Time Warner, Bright House transactions at $195. So our blended average is about $165 and we put in 7 -- a little over $7.5 billion. And before we started selling to their buyback, I know you're -- we're going to talk about that in a moment, we were up about $30 billion, which is a pretty good quantum of return. Where are they? Look, the bet was when we invested and then when -- then subsequently partly confirm when the Time Warner deal was done, that the strong management team there would take advantage of the shift from video to broadband and widen margins that they would add efficiencies that, if we were lucky, we'll be able to capitalize through consolidation of the industry. And a lot of those things have gone right and well, but there are other legs still to come. The continuing shift from video profitability to broadband profitability isn't done. And I know we're going to talk about where we are with broadband, but I still think there's room to go. The growth and potential growth of mobile is going to be a meaningful business. And so I don't know whether we're in the third inning or the fifth inning, but this is not a story that's been finished being told. I think there's a lot of room to grow.

So you just mentioned the selling into the share repurchases at Charter. It's an interesting model, right? You're sort of -- you made the decision, okay, we'll sell into the Charter buybacks, but then we'll use the money and buy back Liberty Broadband and just close this spread. Talk about the ways you can close the spread? And why do you think the spread is as wide as it is?

Well, let's start with what we're doing. We had some alternatives we discussed for the company where we could increase our stake. When we looked at those alternatives versus receiving our share of the capital, which, by the way, gives us complete flexibility and optionality because we get our share with this year about a 5% tax rate, very low because of some things we've done, probably on an ongoing basis, and we'll see where the Biden tax program ends up. But ceteris paribus, where we are today, it will be about 7% in future years, so relatively low amount of drag compared to the roughly 19% discount that is being traded there today. So we could decide any given day, are we effectively buyers of the stock, Charter's a buyer, but are we still a buyer? And if we are a buyer, we get to buy at roughly a 12-point -- 13, 14-point positive spread against the existing I -- we pay our 5% or 7% tax and then we buy at a 19% discount, that's a pretty good money machine on top of what is already a good money machine at Charter. In addition, we're actually more leveraged, slightly leveraged, at the holdco. So if you like Charter and you're bullish on Charter, betting on us with a slightly more levered equity, repurchasing at a 13% to 15% discount is a pretty good transaction. It also does say we get to decide whether if, somewhere down the road, we're not as bullish or we have another alternative for the capital, which we don't have a better one today, we can do something with that capital. Now you asked about tightening that spread, and it's always the case when you do buyback on your stock, you have mixed motivations. Are you trying to buy it cheap, in which case, the discount is a good thing? Or are you trying to get it up, in which case, we'd like to shrink that discount? And I think we have a little bit of 2 hats. The ultimate way to shrink the discount, and I suspect it will happen down the line as it's done in pretty much all our companies, is we will merge the holdco into the operating company, avoid many billion dollars of corporate-level tax. But right now, while we think we're a positive influence on the company and while we have this money machine going of pay 5%, 7% tax and buyback at 19%, I think we're better off doing what we -- taking a little longer view and taking advantage of that discount.

So Charter is different than most of the companies in your portfolio in that it's your largest investment, but it's actually -- it's alone as a minority investment. How do you...

Not alone, we have others like Live Nation. But you're right, in most cases, we have a larger percentage.

And often a dominant controlling interest. So how do you think about that? And what are your updated thoughts on that? Or is that just something you've made peace with over time?

Well, when you're with your wife, it's a partnership and you don't get to dictate and you live with it. And I think that's sort of the way it is in most things in life. You take the hand you're dealt. And we never were presented the opportunity to own all of Charter. We couldn't have afforded it. But it's a partnership that has prospered, and it's one that we're going to continue to hold because it's -- life is sometimes easier if you own 100%, but that doesn't mean you get all the same opportunities.

Let's talk about the business itself. And I assume that you and John still have an important voice through the Board to just make sure that your views are reflected. What are those views? There's this narrative out there that with fiber overbuilds accelerating and with fixed wireless broadband coming and with LEO satellites that the salad days for broadband are almost over and the growth prospects of the business are not as good. Do you agree with that? Or do you see it differently?

Well, let's -- I wouldn't be binary that we're forever going to grow or life is always perfect or that it's over, so let's try and parse that a little. Obviously, the pandemic was a huge -- caused a huge acceleration in the business. How much of that was pulled forward and how much of that is true, the world has learned it needs broadband. I think it's some of each. Clearly, there was some pull forward, but also there remains new household formation. The world has learned that they are demanded for apps and services which require broadband. And then you throw in the fact that we have new federal monies that are going to be on the supply side, helping encourage consumers to get that broadband. All of those drive -- I think that -- I think there's plenty of room left to grow and are both -- are penetrations. And you guys have run a lot of math about how many households there are, where ultimately penetration could get to, and I think it's clearly the case that what we would all assume about Internet penetration 3 years ago versus where we all assume it is today has gone up. It's -- no one doesn't think Internet penetrations are ultimately going to get higher. How much of that is cable takes? How much is it that we see competition from? I'm not so worried about LEOs. Let's -- we'll put that aside. How much we see from fiber overbuild, I think there will be some fiber overbuild, but there's probably at least as much DSL for us to take as there is risk on the fiber side. And so you both have -- I think overall net, we're going to be ahead on share gains. We will continue to gain share, and we will continue to see new household formations, which give us opportunity to grow our broadband houses.

You and John have been skeptics about wireless substitute -- fixed wireless broadband substitution. Is that still the case with 5G?

Well, I think skeptics would be -- we try to look at the facts. You've seen Verizon make a lot of noise 3 years ago or thereabouts about millimeter wave. You've been quite articulate at picking off how that story has been molted, if not completely abandoned. And AT&T doesn't appear it's focused on fixed wireless. And T-Mobile, who is a very good competitor for a lot of reasons, has a little more of a world focus. They are offering lower speeds at similar prices to us, and you really have to look and ask, is that an efficient way to use their spectrum and their -- and is that a good use of their margin overall? If you think about cable usage is running something like 700 gig a month on broadband, mobile usage is something like 10 gig a month, so it's a pretty ineffective network utilization if they can find 10 gig customers versus trying to find 700 gig customers. You also look at what some of the -- just the dynamics, as you pointed out, again, the huge spending on C-band with the combination of what they had to buy in the auction, what they had to -- what they're going to have to do to move incumbent users of the spectrum and what they're going to have to spend on network to grow those 5G networks. They're going to need to find every dollar they can to pay for that. The leverage is high in many of these companies. I think trying to go after broadband where they're less effective and the network utilization is not as attractive for them, I'm not sure that's the best strategy.

So what about wireless for you? You and John have both been real advocates for fixed wireless convergence, not the sort of let's lower churn by selling both, but let's actually start to think of them as meaningfully integrated businesses where they share a lot of the same network facilities. Is that still a vision that you share?

Yes. If anything, I think we're more bullish because look what's already happened. I mean you rightly pointed out, this started out as a "Hey, we're going to lead with our mobile to push our broadband offering where we have strength." I would argue we're going to see profitability, which is quite attractive in the mobile space through our MVNO relationships and our opportunity to substitute on a market-by-market basis our owned facilities. Look, already -- Comcast is already at breakeven in their mobile business. Charter is growing faster and investing more, so it's not at breakeven yet, but has the potential certainly to get there. I think this will be a $1 billion EBITDA business within 4 years and potentially much more if you think about the combination of how much you're pulling in broadband, but just on a stand-alone mobile basis. So I think it's a very attractive offering, yes.

And how do you think about the offload strategy for building out small cells and really leveraging the wires as a basis for lowering the cost of offering wireless?

I think you look where we bought Spectrum, we've tried to be -- we Charter trying to be cost effective, and this is an NPV-driven story. We've got a very attractive MVNO relationship. We've already renegotiated it once to our benefit in terms of the economics. And we will look on a market-by-market basis, where is it better to be an owner rather than a renter? And we don't have to make a national decision on that. We can make a DMA or less decision about -- really ZIP code by ZIP code decision about where we want to do this. So I think it's almost entirely NPV driven. It also has the benefit, secondarily, and this is not the driver, of, if we see those wireless competitors as -- or wireless providers or potentially MVNOs to us as competitors, our opportunity to not provide them MVNO revenue and instead to take it all internally is the secondary benefit. But I don't think that's the primary driver.

Interesting. If I zoom out just a little bit, so a lot of what we talked about with respect to Charter applies to GCI also. But there are some differences, but GCI is now -- got some interesting expansion opportunities building out the Aleutian Islands and what have you. Can you just talk about what you see for GCI over the next couple of years?

GCI is a great test bed for a lot of things. It truly is a -- the largest broadband supplier up there and now has, because they've actually done a 5G upgrade, the largest and most efficient network. So we get to see that interplay pretty well up there and what works. They have, as you rightly pointed out, done some rural broadband expansion, some of it funded by the government assistance. There is a continuing reliance on government funding up there, and we've actually benefited from FCC Commissioner Pai. Chairman Pai was not quite as sympathetic probably as the next generation will be a commissioner or chairwoman -- interim Chairwoman Rosenworcel is probably a more sympathetic ear. So a lot of the things that we want to do require -- they do require federal support, and we're well set up to do that. And we've been winning quite a lot of business up there in broadband that requires new build-outs. There have been also other build-outs where we've done swaps that have grown our footprint. So I'm quite excited about what GCI can do about the interplay between mobile and fiber, and it's a unique proposition up there that we have such strength on both sides.

So Greg, I'd be remiss having you here if I didn't use a little bit of the time to get your broader thoughts on the media ecosystem. And Michael, you may have seen a report that he recently published where he sort of rhetorically asked, "Is streaming a good business?" What do you think? Do you think streaming is good business?

For the vast majority of people, no. I think -- I thought Michael's analysis, I did read it, was very good. Look, back in 2017, as you know, we have these Investor Days, and we always like to come up with a theme. We've done, why the ear is better than the eye. We did about what the value of live. I think it was in 2017, we really talked about how the streaming business was a tough, tough business. I think I called it a circular firing squad where the amount of investment required to be competitive was unattractive for the vast majority of people. At the time, Netflix was the alleged winner and still may very well be, and they were -- the winning was, I think, $4 billion of free cash flow negative a year. And that build-out is -- it's a tough business. And look, they are -- they've done as well and as smartly as anybody could, and they're still -- after several price increases, it's not quite as profitable as you would hope if I had their position. I think your partner's observations about getting to scale about the opportunities that it provides internationally are all right on. But the reality is you're making a big bet, you're trading a lot of effectively analog or linear dollars for digital dimes. In a world where a lot of consumers and a lot of churn, I do think there will be new bundles that arise of some of these online services. That will be the online bundle equivalent to what the cable companies have done historically because there's just not enough heft. I looked at our own observations about what happens in sports internationally. And what's happened in some of these cases where point products, whether it be sports or even other kinds of content, whether it be documentary content or even scripted content, you have to have a lot of scale and you have to have a lot of volume. Otherwise, you're going to see these people have to come together to create that volume in some kind of a bundle.

So you mentioned sports, but your decision not to buy the Fox RSNs a couple of years ago sure looks like the right decision now.

Well, I would note, we had a what arguably was a different strategy. We really were trying to get all the distributors to come on board and guarantee we had enough distribution for a period of time such that we can basically get all our capital off the table. And I was attempting to say to them, "Hey, you're going to be better off with a partner you know than with somebody who is -- may use their retrans and has other kinds of assets which are not sympathetic." So yes, I do agree that ecosystem is severely at risk. Whether we would have been in exactly the same position or we would have been able to find an attractive return, I'm still optimistic we might have done the latter.

So let's -- it's a good segue into the Braves and Formula 1 because the whole ecosystem around televised sports is changing pretty rapidly. And I think most, it's fair to say, would say not for the better. So what does that mean for the Braves? And then internationally, what does it mean for Formula 1?

Well, let's start with -- when you say it's not for the better, we -- it depends on -- it's like every golf shot, there's somebody who's happy and there's somebody who's sad. So if you're looking at, say, the Dodgers. The Dodgers are collecting an unsustainable, in my judgment, amount of money. It's particularly annoying that they're taking it from Charter, but they're only being shown in a relatively small -- there's been a recut of the deal with AT&T so that they're carried on DIRECTV as well, but they're in a relatively small amount of households compared to most markets. So they collect that money. In the short term, they have less long-term demand. And ultimately, I don't think it's a sustainable number. It's truly annoying because Charter is paying it, and we, the Braves, are getting a lot less money than that, and we have to compete with them. But if you look at the Braves situation, the Braves are in about as good a situation as possible. As the ecosystem breaks, we have the largest broadband territory in the United States, about 12 million, 12.5 million broadband households. And we have a good deal, but not a deal like the Dodgers, which looks less sustainable. So I do think there's going to be pressure as these RSNs bundle and crack. And I think MLB is worried and rightly looking at alternatives to make sure there's a good glide path. But in the Braves case, in particular, I think given the scale of our broadband territory, we're about as well positioned as anybody to think about digital alternatives.

So how about -- for Formula 1, I mean, obviously, the core of that business is non-U.S. But are the same changes coming globally you think that we're starting to see here in the U.S. where the sports ecosystem sort of unravels a bit?

A couple of differences and really it is country by country, as you know, Craig. In general, a lot less -- never had the penetration of cable and high premium cable, never had -- and the decline is less. Markets are less developed in many cases. In every market, really, we go through and look at how much do we want to be free to air, how much do we want to be paid and how much are we going to look at these digital alternatives? And those digital alternatives are going to get more attractive over time. Our business there is a little different than some U.S. sports because advertising and sponsorship is a big deal, and therefore, you want that free-to-air exposure. We have a much larger percentage of advertising and sponsorship compared to at Formula 1 and, say, the Braves, just a relative on the percentage of the P&L. And we have promoters who pay us fees in part based on overall demand. So we're weighing how much is free to air, how much is paid and how much will be these new digital alternatives in every market. And I don't think we have to make a -- we don't have to make a global decision. We get to look in each country and argue, well, what do we do here and what are the relative alternatives offered to us.

Do you worry that it becomes -- so you've talked about trying to grow fan interest. Is it harder to grow fan interest when it just gets tougher to reach the customer? I think about sort of WWE tried to go direct to do it here in the States, couldn't get it off the ground, sold the rights to Peacock. It's not easy to take these kind of monolines and sustain fan interest and make sure they're in front of fans in a way that fans want to see it.

A couple of points there. And by the way, let's start with your WWE point, which is, look, I think that shows somewhat the difficulty of trying to build a stand-alone product. and WWE, by the way, has tonnage of content. Baseball is high, WWE is ridiculously high and Formula 1 is way lower with 23 races this year, right? There's just a ton of content, and they weren't able to pull it off. But I'm not sure they didn't cut a good deal with Peacock because there's just a -- Peacock is going to bring -- they obviously are in that expensive phase. They want to grow, but they're going to bring in eyeballs theoretically that would be broader. But looking at us in Formula 1, we are blessed that the brand is so powerful and so global, we're seeing about almost 90 million fans a week and looking at our product. We are seeing continued growth. We've been the fastest-growing sport on social media for the last 3 years. We've opened up a ton of new opportunities with things like fan experiences and the Netflix series. My 12-year-old niece now loves Lewis Hamilton. And without Netflix, she wouldn't know who the heck Lewis Hamilton was, even if her uncle is involved with Formula 1. And the breadth of people who come up and say to me, they saw it on Netflix, and they they've gotten obsessed through Formula 1 here in the U.S., where we have not been our historical stronghold, as you know, Western Europe is our origin and where we're still strongest, I think we found a lot of other ways to reach fans. And the growth of audiences and the growth of interest in Formula 1 has been great.

Can you just talk about the transition from Chase to Stefano and what changes you think that kind of bring?

Well, first, Chase did an amazing job. And -- or I feel guilty at times like I was the one who sold him to take the job and then he had to go to fly around the world and deal with recalcitrant teams and Chase was a warrior for the right thing there and had driven such good changes. Bernie Ecclestone built the product, deserves unbelievable credit, but there wasn't the long-term vision, and there was a very contangos relationship with promoters. And Formula 1, the rights holder, us, there was a very contangos relationship between the teams and F1 and us. That's totally changed. And the tone is so much better that we're in this ecosystem together and building things. And Chase was able to get a new concrete agreement done, which is such a major achievement compared to what was done before. Bernie Ecclestone and Max mostly after the '09 recession trying to get a cost cap and couldn't get it done. We got their -- dumb Americans, what do we know about the sport, and we say, we want to get it done, they laughed at us. Chase gets it done, full credit, and Chase and team. So Chase did an amazing job changing the tone, setting the sport in the right direction and above all getting that concrete agreement with the cost cap. Stefano -- and Chase remains our non-exec chair, and that relationship is valuable. Stefano, we have a lot of portfolio companies. We've put in a lot of execs. I've never put an executive and announced a new CEO and had the outpouring of people saying, "You got the best person you could possibly find." He's beloved in the sport. His knowledge starts from working at Ferrari for years to eventually being team principal to working at Audi to running Lamborghini to coming back into running the whole sport. So he has opportunities and knowledge around the OEM relationships. If we didn't know anything about dealing with the teams, we knew nothing about doing with the OEMs, the car manufacturers, Stefano knows that world. Stefano has great credibility about the next generation of what we can do with fan interest. The things he did, for example, between a Lamborghini with TikTok were absolutely groundbreaking. So I think there are a lot of ways in which Stefano will continue the successive case and move us to new areas.

So let's turn to SiriusXM, another asset that sort of like Charter, I guess, has been viewed for a long time, has facing a lot of competitive threats. And you've consistently bet on it by just buying back the stock, and it's obviously worked out awfully well. You mentioned before that the ear is better than the eye or the ear is more valuable than the eye...

There's more opportunity, I think, is what I said. There was all that money being spent on the eye, and there was undermonetization and lower costs in the ear.

Yes. So talk about that. Do you still have the view that audio is the sweet spot that it was then?

Well, it's clearly gotten more competitive. And I think Daniel Ek was listening to our talk because what he's done, for example, investing in podcasting as have we and as have others like iHeart. Broadening out both on new devices and new kinds of content and reducing reliance on recorded music, all are good things to broaden your appeal and probably improve your margins. We already have excellent margins at SiriusXM, so it may not be as much opportunity for us. But for people who've relied on recorded music, there's opportunity going into other spaces. The -- there is undermonetization still. It is getting better all the time. What we've seen at Pandora on CPMs and the like have gone up dramatically in the last 3 years, and we're beneficiaries of that. And new content has got much room to grow in terms of how you monetize podcasts over time. People will get much smarter about insertions and targeting and those things, I think there's a lot of room to grow there.

Yes, so looking at -- we're looking already, even with chip shortages, at something like an 18 million car pace for -- sale pace for this year. And again, it'd be faster, I think, if there were not supply constraints. And your new car penetration is about, what, 80% and growing?

Yes.

You guided to 80% Sirius-equipped vehicles in the next 4 years. How do you get there? And what does it mean for the long term of that business?

So we're already at 80% penetration of SiriusXM in cars, but I want to [indiscernible] more. What we're guiding is, in addition, we're going to get to 80% frequency our new...

That's right.

Our new system, which is really takes the best of both. It leverages the satellite capability in that linear feed and then also has leverages the modem in the car and takes advantage of downloaded content, which may be incremental or tied. And it lets us know in addition exactly who's listening to what they're doing, et cetera. So that 360L and our strength in that is an important next step for us because knowing what our customers are doing, who they are, targeted ads, ways that we can reach them, all of those things become far more powerful and attractive in a 360L world.

What do you think today about the Pandora acquisition, even beyond the concept of 360L, sort of where does Pandora fit?

Look, Pandora, we have said all along that the streaming business is a tough business and streaming music. And our experience with Pandora has only confirmed that, and it's just a very competitive space. What Pandora brought was ad tech capabilities, mobile capabilities and a breadth of audience that we would not have had without it. So even though we certainly would like to have stronger growth in MAUs and less declines, we still get valuable forward platform for us in having those other elements. So it's both paying currently and sets us up well for the future in many ways.

So there's such a long list of businesses to talk about -- let's talk about trip. You've talked about starting a subscription service for trip. That's obviously one of the businesses that will come roaring out of the COVID lockdowns anyway as people start returning to travel. But what did you see that made you think that a subscription model was something that would appeal to customers in this space?

First, as you rightly point out, we do envision, particularly in vacation travel, an enormous amount of tailwind. We talked about a little earlier on Live Nation. You pump an extra couple of trillion dollars into personal income over 2 years, and U.S. personal income has gone up quite a lot, you shut down the service economy and big parts of travel, hospitality, live events, restaurants, people have a lot of savings, and they have a lot of product that led to some of that inflation we talked about on the product side. But when it opens up, it goes crazy. And we're seeing that in many markets where we're already -- the minute we open up restaurants and the minute we open up travel, domestic travel only usually, we're seeing massive pops. And I think by the fourth quarter, we're going to see, even with the restrictions that will still be in place, that our Attractions business, for example, were bigger than 2019. So lots of tailwind there and lots of demand for hotels which will generate lots of opportunity for us in the core traditional business. But what we figured out is really that our strength is the brand, the potential to offer attractive discounts to consumers and leverage our strength as a brand and get them on a subscription basis. You know Liberty has a history in subscriptions, has a lot of subscription businesses. And really credit Steve Kaufer for thinking how that would fit in with the travel experience, how customers would benefit both from discounts and from benefits in a way that was a win for us and a win for consumers, I think, is very powerful.

Talk about a business that comes roaring out of the lockdowns into recovery. You mentioned Live Nation, one of the maybe surprises -- or not a surprise, but something that people didn't spend enough time thinking about was the supply side of just how eager musicians would be to get back out on the road and perform in front of audiences. Want to break any news for us about any big tours that people haven't heard about that are coming?

No, no. I'm going to say that to Michael to do that, Michael Rapino. But look, we are already seeing -- start on the supply side, as you rightly pointed out, both because it's their -- in many cases, their primary source of revenue, artists want to get out. But in many cases, look, if you're an artist sitting in your -- zooming to your fans is not a particularly uplifting experience. They want that touch as well and that reality. So they both have an economic incentive, and it's part of the art and part of their whole -- why they went into many and why they went into the business in the first place was to be a performer. And so I think we leverage that on the supply side. On the demand side, we touched on the amount of pent-up interest. We're already seeing basically demand twice as high as we had in 2019 when we put concerts out. Things are on fire. '21 is [ to a degree ] we can open and will open and by location is going to be very powerful. And as we go into '22, it will only be better.

I was going to say, do you think that there was this sort of mean level analysis of the roaring 20s, so to speak, that this would be a decade-long boom in people sort of getting their ya-ya's out after a year of being locked up. Do you have any...

No, I don't know about decades long, but is there a COVID YOLO, you only live once, I think there definitely will be. They're both pent-up interest and saying, my goodness, who knows, they may shut it down again, I got to get out there.

As a last business to touch on briefly is Qurate. That is a business that, as you say, sort of, I think, all of us sort of looking at it thought, boy, that's going to be tough during COVID. What did you learn about the consumer at Qurate that surprised you the most and that led to such a successful navigation of COVID there?

Well, I credit the management team, Mike, George and his team for understanding how the market would change. So we saw -- obviously, helped by the tailwind of people being home, so they probably had more time on television. Retail locations being shut, so they were looking for things like us who would ship. But really, above all the work that they did shifting the focus away from apparel, away from health and beauty towards home goods, towards garden supplies, the -- we were -- and I went through some of this at our Investor Day, we were -- the demand for bread loaf-making devices, the demand for garden supplies, pool furniture, even more at some of the -- our other companies, Cornerstone Brands, which is part of Qurate, you're looking at EBITDA nearly tripling over the course of COVID. Because we were able to reduce discounts, consumers wanted home and garden, and we were able to meet their needs. That nesting feature of COVID, we took advantage of in a great way and credit to the QVC and the Qurate teams for doing that.

What -- you've been transitioning or preparing for a transition from television for a long time in that business and weaning yourself from the old television ecosystem...

I would say it slightly differently, which is the TV is declining, so we still love it, but the reality is it can't be the only reliance we have. We're not weaning. I would say we're trying to leverage that as much as we can. Running a 24-hour barker channel, which is a powerful storyteller for us is great, but we need other places to do it. And that team has done a great job getting on Roku and on other devices, Hulu and being out there in the new formats and making their storytelling and their video commerce powerful on those kind of platforms.

And what kind of engagement do you get with those? Has it transitioned as well? Just because it's there, it doesn't mean that it's being viewed?

So it's a little different. You think about it. I don't think you have, in the same way that in some households, some of our wonderful customers who have had QVC literally on all day, I think it's more a destination, and it's probably a little more appointment than the background, the powerful background that it might have been in the linear household. But also when people go there, they probably go with higher intent, that they go with the purpose and they go with the idea of purchasing. So a little bit of -- I think that's -- a, it's a story that's building and b, it's going to be a slightly different kind of story.

So we always wrap up with a view of the world. And we talked about this a little bit before, but 2020 was a terrible year for economic activity, but a great year for the market. Now we're sort of seeing the reverse of that, or at least this week we are. I'll go back to what I said, so where do you think the opportunities are? And it may be within the U.S. market in businesses or sectors, but it may also be globally, would you say, I'd rather be spending my time looking at Europe or I'd rather be spending my time looking at emerging markets or...

We are a company that has had a U.S. focus just given the kind of businesses we're in. SiriusXM and Charter, obviously, U.S. only or virtually Sirius has got some Canadian, et cetera, and Mexican. But we've also grown dramatically in places outside the United States, more recent businesses like Formula 1, TripAdvisor, Qurate all have big international arms. I think we are looking, just as a matter, of course, of trying to look at other markets, which we haven't before. And the SPAC gives us license to do that in ways that maybe you have more flexibility. I think the United States is probably going to exit first for a lot of reasons and already is in terms of an operating basis. Vaccine penetration, flexibility of the markets, Federal stimulus, all of those are probably going to cause those operating businesses to do quite well. And we're looking at those, but we're certainly not limiting ourselves to the U.S.

And if I go back to the media questions that we were asking before, if you had your druthers, the old debate of content is king and distribution is the power behind the throne, I think, was the joke that Dick Parsons used to always say. Where would you want to be in the value chain today?

Well, you look at the -- look at -- if you're talking mostly about cable, start with where I think you're -- where you guys are not only, but where you guys have your -- a lot of strength and where we have a lot of history. Today, in general, I'd rather be a cable company and not a cable net. I think that's a harder transition. And in Middle East because they're both suffering from the changes in the market related to traditional linear video distribution, the cable nets are quickly trying to invest and pursue their plus strategy. Everyone's got a plus. They're all pursuing their pluses, but I think in a lot of cases, that's a lot of spending with a lot of churn against their traditional in their side. On the cable net side, their traditional linear video side, they are pushing price increases into a declining market, which will accelerate further the decline of that video market, so that's a cycle down, that's a tough place to be. On the other hand, the distribution side, there is a transition coming where the bundle will break more quickly, and there will be new bundles, as I said, that I suspect will be much more a la carte-oriented and less eat the whole meal deal. But the strength of the video -- excuse me, the strength of the broadband business and that shift with much higher returns on invested capital, much less supplier power, all of those bode well, I think, for the cable companies, the Charters and the Comcast and the Altices.

So we will, as always, be looking carefully at what you guys decide to do, it's -- you have a lot of watchers that look to you as an important leading indicator of where to be. So I thank you for this. It was a pleasure. Next time, I hope to do it in person. But it's...

I hope so. Thank you, Craig, and thank you to the listening audience.

All right.