As filed with the Securities and Exchange Commission on April 5, 2023

REGISTRATION NO. 333-268921​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2
TO

FORM S-4

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

LIBERTY MEDIA CORPORATION

(Exact name of Registrant as specified in its charter)​

12300 Liberty Boulevard, Englewood, Colorado 80112, (720) 875-5400

(Address, including zip code, and telephone number, including area code, of Registrant’s
principal executive offices)​

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the proposed transactions described herein have been satisfied or waived, as applicable.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:   ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.   ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)   ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)   ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Information in this joint proxy statement/prospectus is not complete and may be changed. We may not sell the securities offered by this joint proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.

Subject to completion, dated April 5, 2023

LIBERTY MEDIA CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5400

[           ]​

Dear Stockholder:

You are cordially invited to a special meeting of stockholders of Liberty Media Corporation (Liberty Media) to be held at [           ], Mountain time, on [           ]. The special meeting will be held via the Internet and will be a completely virtual meeting of stockholders. You may attend the special meeting, access the stockholders list, submit questions and vote your shares electronically during the meeting via the Internet by visiting www.virtualshareholdermeeting.com/[           ]. To enter the special meeting, you will need the 16-digit control number that is printed in the box marked by the arrow on your proxy card. Liberty Media recommends logging in at least fifteen minutes before the meeting to ensure that you are logged in when the meeting starts. Online check-in will start shortly before the meeting on [           ].

A notice of the special meeting, a proxy card and a joint proxy statement/prospectus containing important information about the matters to be acted on at the special meeting accompany this letter.

At the special meeting, holders of Liberty Media’s Series A Liberty Braves common stock (BATRA) and Series B Liberty Braves common stock (BATRB) will be asked to consider and vote on a proposal (the Split-Off Proposal) to approve the redemption by Liberty Media of each outstanding share of BATRA, BATRB and Liberty Media’s Series C Liberty Braves common stock (BATRK) in exchange for one share of the corresponding series of common stock of a newly formed, wholly owned subsidiary of Liberty Media, Atlanta Braves Holdings, Inc. (SplitCo). We refer to the redemption and the resulting separation of SplitCo from Liberty Media pursuant to the redemption as the Split-Off. After the Split-Off, SplitCo will hold all of the businesses, assets and liabilities currently attributed to Liberty Media’s Braves Group, including 100% of the ownership and voting interests in Braves Holdings, LLC, which is the owner of the Atlanta Braves Major League Baseball Club, and certain assets and liabilities associated with the Atlanta Braves Major League Baseball Club’s stadium and Braves Holdings’ mixed-use development and corporate cash. The intergroup interests in the Braves Group attributed to Liberty Media’s existing Liberty SiriusXM Group and Formula One Group remaining immediately prior to the Split-Off, however, will be settled and extinguished in connection with the Split-Off. SplitCo expects to list its shares of Series A common stock (New BATRA) and Series C common stock (New BATRK) on the Nasdaq Global Select Market under the symbols “BATRA” and “BATRK,” respectively. SplitCo currently expects that its Series B common stock (New BATRB) will trade on the OTC Markets under the symbol “BATRB.” SplitCo will be an “emerging growth company” as the term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, has elected to comply with certain reduced public company reporting requirements.

Additionally, at the special meeting, holders of BATRA, BATRB, BATRK, Liberty Media’s Series A Liberty SiriusXM common stock (LSXMA), Series B Liberty SiriusXM common stock (LSXMB), Series C Liberty SiriusXM common stock (LSXMK), Series A Liberty Formula One common stock (FWONA), Series B Liberty Formula One common stock (FWONB) and Series C Liberty Formula One common stock (FWONK) (BATRA, BATRB, BATRK, LSXMA, LSXMB, LSXMK, FWONA, FWONB and FWONK, collectively, Liberty Media common stock) will be asked to consider and vote on a group of related proposals, which we refer to as the Reclassification Proposals, each of which are conditioned on the approval of the Split-Off, to approve the adoption of an amendment and restatement of Liberty Media’s certificate of

incorporation (as so amended and restated, the Liberty Media restated charter) to, among other things, following the completion of the Split-Off, (i) reclassify Liberty Media’s then-outstanding shares of common stock, which will consist of LSXMA, LSXMB, LSXMK, FWONA, FWONB and FWONK, into three new tracking stocks to be designated the Liberty SiriusXM common stock, the Liberty Formula One common stock and the Liberty Live common stock, and, in connection therewith, provide for the attribution of the businesses, assets and liabilities of Liberty Media’s existing Liberty SiriusXM Group and Formula One Group among Liberty Media’s newly created Liberty SiriusXM Group (New Liberty SiriusXM Group), Formula One Group (New Formula One Group) and Liberty Live Group (Liberty Live Group), (ii) reclassify each share of Liberty Media’s then-outstanding Liberty SiriusXM common stock into newly issued shares of common stock of Liberty Media as described below and (iii) reclassify each share of Liberty Media’s then-outstanding Liberty Formula One common stock into newly issued shares of common stock of Liberty Media as described below. We refer to reclassification of the then-outstanding shares of Liberty Media common stock and the associated attribution of Liberty Media’s businesses, assets and liabilities into three new tracking stock groups as the Reclassification.

If the Reclassification Proposals are approved and the Reclassification is implemented, at the date and time of the effectiveness of the Liberty Media restated charter, each outstanding share of LSXMA, LSXMB, LSXMK, FWONA, FWONB and FWONK would be reclassified as follows:

•

one share of LSXMA shall be reclassified into [   ] of a share of a new Series A Liberty SiriusXM common stock (New LSXMA) and [   ] of a share of a new Series A Liberty Live common stock (LLYVA);

​

•

one share of LSXMB shall be reclassified into [   ] of a share of a new Series B Liberty SiriusXM common stock (New LSXMB) and [   ] of a share of a new Series B Liberty Live common stock (LLYVB);

​

•

one share of LSXMK shall be reclassified into [   ] of a share of a new Series C Liberty SiriusXM common stock (New LSXMK) and [   ] of a share of a new Series C Liberty Live common stock (LLYVK);

​

•

one share of FWONA shall be reclassified into [   ] of a share of a new Series A Liberty Formula One common stock (New FWONA) and [   ] of a share of LLYVA;

​

•

one share of FWONB shall be reclassified into [   ] of a share of a new Series B Liberty Formula One common stock (New FWONB) and [   ] of a share of LLYVB; and

​

•

one share of FWONK shall be reclassified into [   ] of a share of a new Series C Liberty Formula One common stock (New FWONK) and [   ] of a share of LLYVK.

​

Cash will be paid in lieu of any fractional shares. The shares of New LSXMA, New LSXMB and New LSXMK (collectively, the New Liberty SiriusXM common stock) would be newly authorized and issued shares of three series of common stock of Liberty Media intended to track and reflect the separate economic performance of the businesses, assets and liabilities to be attributed to the New Liberty SiriusXM Group, which would initially include: Liberty Media’s approximately 82% interest in Sirius XM Holdings Inc. (Sirius XM Holdings), corporate cash, Liberty Media’s 1.375% Cash Convertible Senior Notes due 2023 and related financial instruments, Liberty Media’s 3.75% Convertible Senior Notes due 2028, Liberty Media’s 2.125% Exchangeable Senior Debentures due 2048, Liberty Media’s 2.75% Exchangeable Senior Debentures due 2049 and margin loan obligations incurred by Liberty Media’s wholly owned special purpose subsidiary, which are secured by shares of common stock of Sirius XM Holdings, together with certain shares of New BATRA expected to be issued in connection with the settlement and extinguishment of the intergroup interest in the Braves Group attributed to the Liberty SiriusXM Group remaining immediately prior to the Split-Off and certain other assets and liabilities attributed to the Liberty SiriusXM Group. The shares of New FWONA, New FWONB and New FWONK (collectively, the New Liberty Formula One common stock) would be newly authorized and issued shares of three series of common stock of Liberty Media intended to track and reflect the separate economic performance of the businesses, assets and liabilities to be attributed to the New Formula One Group, which would initially include: all of the businesses, assets and liabilities of Liberty Media other than those specifically attributed to the New Liberty SiriusXM Group or the Liberty Live Group, including Liberty Media’s interests in Formula 1, corporate cash, Liberty Media’s 1% Cash Convertible Notes due 2023 and Liberty Media’s 2.25% Convertible Senior Notes due 2027, together with certain other assets and liabilities attributed to the Formula One Group. The shares of LLYVA, LLYVB and LLYVK (collectively, the Liberty Live common stock) would be newly authorized and issued shares of three series of common stock of Liberty Media intended to track and reflect the separate economic

performance of the businesses, assets and liabilities to be attributed to the Liberty Live Group, which would initially include: Liberty Media’s approximately 31% interest in Live Nation Entertainment, Inc. (Live Nation), corporate cash, certain public and private assets currently attributed to the Formula One Group, Liberty Media’s 0.5% Exchangeable Senior Debentures due 2050, margin loan obligations incurred by Liberty Media’s wholly owned special purpose subsidiary, which are secured by shares of common stock of Live Nation, together with other assets and liabilities. In March 2023, Liberty Media made a series of investments in certain exchange traded funds in an aggregate amount equal to $120 million (ETF Assets). Such ETF Assets are initially attributed to the Formula One Group and will be attributed to the Liberty Live Group in the Reclassification. The market value of the ETF Assets may fluctuate over time. As of [   ], 2023, the market value of the ETF Assets is $[   ].

The New Liberty SiriusXM common stock, the New Liberty Formula One common stock and the Liberty Live common stock will be tracking stock intended to reflect or “track” the economic performance of a particular business or “group,” rather than the economic performance of Liberty Media as a whole. Holders of tracking stock have no direct claim to the group’s stock or assets and therefore do not own, by virtue of their ownership of a Liberty Media tracking stock, any equity or voting interest in a company, such as Sirius XM Holdings or Live Nation, in which Liberty Media holds an interest that is attributed to a Liberty Media tracking stock group, such as the New Liberty SiriusXM Group or the Liberty Live Group. Holders of a tracking stock are also not represented by separate boards of directors. Instead, holders of a tracking stock are stockholders of Liberty Media, with a single board of directors and subject to all of the risks and liabilities of Liberty Media as a whole.

If the Split-Off Proposal is approved and certain other conditions are satisfied (or, if permissible, waived), we expect to complete the Split-Off as soon as practical after the special meeting and we will announce the date and time of the Split-Off shortly following the special meeting. If the Reclassification Proposals are approved and certain other conditions are satisfied (or, if permissible, waived), we expect to complete the Reclassification as soon as practical after the Split-Off and we will announce the date and time of the Reclassification shortly following the special meeting. Each of the Reclassification Proposals is conditioned on the approval of the Split-Off Proposal. The Split-Off Proposal, however, is not conditioned on the approval of any of the Reclassification Proposals.

Liberty Media expects to list the shares of New LSXMA, New LSXMB, New LSXMK, New FWONA, New FWONK, LLYVA and LLYVK on the Nasdaq Global Select Market under the symbols “LSXMA,” “LSXMB,” “LSXMK,” “FWONA,” “FWONK,” “LLYVA,” and “LLYVK,” respectively. We currently expect that the shares of New FWONB and LLYVB will trade on the OTC Markets under the symbols “FWONB” and “LLYVB,” respectively.

The Liberty Media board of directors has approved and declared advisable the Split-Off Proposal and each of the Reclassification Proposals (together with a related proposal that would permit Liberty Media to adjourn the special meeting to solicit further proxies), and the transactions contemplated by each of them, and recommends that the holders of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK vote “FOR” each of them, as applicable.

Liberty Media is seeking approval from holders of BATRA, BATRB and (for certain proposals) BATRK of both the Split-Off Proposal and the Reclassification Proposals. You are encouraged to vote “FOR” all of the proposals presented and further described in the accompanying joint proxy statement/prospectus.

Liberty Media is seeking approval from holders of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK of each of the Reclassification Proposals. You are encouraged to vote “FOR” all of the Reclassification Proposals presented and further described in the accompanying joint proxy statement/prospectus.

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please vote as soon as possible to make sure that your shares are represented.

Thank you for your cooperation and continued support and interest in Liberty Media.

Very truly yours,

Gregory B. Maffei
President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of any of the proposals or the securities being offered in the Split-Off or the Reclassification or has passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

Investing in the securities of SplitCo or Liberty Media involves risks. See “Risk Factors” beginning on page 47.

The accompanying joint proxy statement/prospectus is dated [           ] and is first being mailed on or about [           ] to the stockholders of record as of 5:00 p.m., New York City time, on [           ].

 

LIBERTY MEDIA CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5400

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
to be Held on [           ]

NOTICE IS HEREBY GIVEN of the special meeting of stockholders of Liberty Media Corporation (Liberty Media) to be held at [           ], Mountain time, on [           ]. The special meeting will be held via the Internet and will be a completely virtual meeting of stockholders to consider and vote on the following proposals:

​

1.

A proposal (the Split-Off Proposal) to approve the redemption by Liberty Media of each outstanding share of Liberty Media’s Series A Liberty Braves common stock (BATRA), Series B Liberty Braves common stock (BATRB) and Series C Liberty Braves common stock (BATRK) in exchange for one share of the corresponding series of common stock of a newly formed, wholly owned subsidiary of Liberty Media, Atlanta Braves Holdings, Inc. (SplitCo). We refer to the redemption and the resulting separation of SplitCo from Liberty Media pursuant to the redemption as the Split-Off. After the Split-Off, SplitCo will hold all of the businesses, assets and liabilities currently attributed to Liberty Media’s Braves Group, including 100% of the ownership and voting interests in Braves Holdings, LLC, which is the owner of the Atlanta Braves Major League Baseball Club, and certain assets and liabilities associated with the Atlanta Braves Major League Baseball Club’s stadium and Braves Holdings’ mixed-use development and corporate cash.

​

2.

The following related proposals (the Reclassification Proposals), each of which are conditioned on the approval of the Split-Off:

​

(a)

a proposal (the Tracking Stock Proposal) to approve the adoption of an amendment and restatement of Liberty Media’s restated certificate of incorporation (the certificate of incorporation), to, among other things, following the completion of the Split-Off, reclassify Liberty Media’s then outstanding shares of common stock, which will consist of its Series A Liberty SiriusXM common stock (LSXMA), Series B Liberty SiriusXM common stock (LSXMB), Series C Liberty SiriusXM common stock (LSXMK), Series A Liberty Formula One common stock (FWONA), Series B Liberty Formula One common stock (FWONB) and Series C Liberty Formula One common stock (FWONK), into three new tracking stocks to be designated the Liberty SiriusXM common stock, the Liberty Formula One common stock and the Liberty Live common stock, and, in connection therewith, provide for the attribution of the businesses, assets and liabilities of Liberty Media’s existing Liberty SiriusXM Group and Formula One Group among Liberty Media’s newly created Liberty SiriusXM Group, Formula One Group and Liberty Live Group.

​

(b)

a proposal (the Liberty SiriusXM Group Recapitalization Proposal) to approve the adoption of an amendment and restatement of Liberty Media’s certificate of incorporation, in connection with the reclassification of Liberty Media’s then outstanding shares of common stock, to, among other things, following the completion of the Split-Off, reclassify each outstanding share of LSXMA, LSXMB and LSXMK, as follows:

​

•

one share of LSXMA shall be reclassified into [      ] of a share of a new Series A Liberty SiriusXM common stock and [      ] of a share of a new Series A Liberty Live common stock (LLYVA);

​

•

one share of LSXMB shall be reclassified into [      ] of a share of a new Series B Liberty SiriusXM common stock and [      ] of a share of a new Series B Liberty Live common stock (LLYVB);

​

•

one share of LSXMK shall be reclassified into [      ] of a share of a new Series C Liberty SiriusXM common stock and [      ] of a share of a new Series C Liberty Live common stock (LLYVK);

​

 

5

 

(c)

a proposal (the Formula One Group Recapitalization Proposal) to approve the adoption of an amendment and restatement of Liberty Media’s certificate of incorporation, in connection with the reclassification of Liberty Media’s then outstanding shares of common stock, to, among other things, following the completion of the Split-Off, reclassify each outstanding share of FWONA, FWONB and FWONK, as follows:

​

•

one share of FWONA shall be reclassified into [   ] of a share of a new Series A Liberty Formula One common stock and [   ] of a share of LLYVA;

​

•

one share of FWONB shall be reclassified into [   ] of a share of a new Series B Liberty Formula One common stock and [   ] of a share of LLYVB; and

​

•

one share of FWONK shall be reclassified into [   ] of a share of a new Series C Liberty Formula One common stock and [   ] of a share of LLYVK.

​

3.

A proposal (the Adjournment Proposal) to approve the adjournment of the special meeting by Liberty Media from time to time to solicit additional proxies in favor of the Split-Off Proposal and/or the Reclassification Proposals if there are insufficient votes at the time of such adjournment to approve the Split-Off Proposal and/or the Reclassification Proposals or if otherwise determined by the chairperson of the meeting to be necessary or appropriate.

​

Each of the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal (collectively, the Reclassification Proposals) is dependent on the others, and none of them will be implemented unless they are all approved. In addition, the Reclassification Proposals are dependent and conditioned on the approval of the Split-Off Proposal, and none of them will be implemented unless the Split-Off Proposal is approved and the Split-Off is completed. The Split-Off is conditioned on the receipt of the requisite approval of the Split-Off Proposal but not on the receipt of the requisite approval of any of the Reclassification Proposals.

Liberty Media will transact no other business at the Liberty Media special meeting, except such business as may properly be brought before the Liberty Media special meeting or any adjournments or postponements thereof by or at the direction of the Liberty Media board of directors in accordance with Liberty Media’s amended and restated bylaws. The accompanying joint proxy statement/prospectus describes the proposals listed above in more detail. Please refer to the joint proxy statement/prospectus, including the forms of the proposed amended and restated SplitCo certificate of incorporation and the proposed amended and restated certificate of incorporation of Liberty Media and all other annexes and any documents incorporated by reference, for further information with respect to the business to be transacted at the Liberty Media special meeting. You are encouraged to read the entire document carefully before voting. In particular, please see “Risk Factors” beginning on page 47 for an explanation of the risks associated with the transactions contemplated by the Split-Off Proposal and the Reclassification Proposals.

Holders of record of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK, in each case, outstanding as of 5:00 p.m., New York City time, on [                 ], the record date for the special meeting, will be entitled to notice of the special meeting and to vote on the proposals, as applicable, at the special meeting or any adjournment or postponement thereof as follows:

•

Holders of record of BATRA and BATRB will be entitled to vote on the Split-Off Proposal. Holders of BATRK, LSXMA, LSXMB, LSXMK, FWONA, FWONB and FWONK are not being asked to vote, and are not entitled to vote, on the Split-Off Proposal because such vote is not required by Liberty Media’s certificate of incorporation or the laws of the State of Delaware.

​

•

Holders of record of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK will be entitled to vote on each of the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal. Holders of BATRA, BATRB and BATRK should note that they are entitled to vote on these proposals pursuant to the terms of Liberty Media’s certificate of incorporation even though the Reclassification will occur following the Split-Off.

​

•

Holders of record of LSXMA, LSXMB, BATRA, BATRB, FWONA and FWONB will be entitled to vote on the Adjournment Proposal. Holders of LSXMK, BATRK and FWONK are not being

​

 

6

 

asked to vote, and are not entitled to vote, on the Adjournment Proposal because such vote is not required by Liberty Media’s certificate of incorporation or the laws of the State of Delaware.

The proposals described above require the following stockholder approvals:

•

The Split-Off Proposal requires the affirmative vote of the holders of a majority of the aggregate voting power of the shares of BATRA and BATRB outstanding as of the record date, in each case, entitled to vote and that are present in person or by proxy at the special meeting, voting together as a separate class. Pursuant to Liberty Media’s certificate of incorporation, with respect to the Split-Off Proposal, each holder of record of BATRA is entitled to one vote per share and each holder of record of BATRB is entitled to ten votes per share.

​

•

Each of the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal requires the affirmative vote of the holders of

​

(i)

a majority of the aggregate voting power of the shares of LSXMA, LSXMB, BATRA, BATRB, FWONA and FWONB outstanding as of the record date, in each case, entitled to vote at the special meeting, voting together as a single class;

​

(ii)

a majority of the aggregate voting power of the shares of LSXMA, LSXMB and LSXMK outstanding as of the record date, in each case, entitled to vote at the special meeting, voting together as a separate class;

​

(iii)

a majority of the aggregate voting power of the shares of BATRA, BATRB and BATRK outstanding as of the record date, in each case, entitled to vote at the special meeting, voting together as a separate class; and

​

(iv)

a majority of the aggregate voting power of the shares of FWONA, FWONB and FWONK outstanding as of the record date, in each case, entitled to vote at the special meeting, voting together as a separate class.

​

Pursuant to Liberty Media’s certificate of incorporation, with respect to the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal, each holder of record of LSXMA is entitled to one vote per share, each holder of record of LSXMB is entitled to ten votes per share and (with respect to the separate class vote referenced in clause (ii) above) each holder of record of LSXMK is entitled to 1/100 of a vote per share; each holder of record of BATRA is entitled to one vote per share, each holder of record of BATRB is entitled to ten votes per share and (with respect to the separate class vote referenced in clause (iii) above) each holder of record of BATRK is entitled to 1/100 of a vote per share; and each holder of record of FWONA is entitled to one vote per share, each holder of record of FWONB is entitled to ten votes per share and (with respect to the separate class vote referenced in clause (iv) above) each holder of record of FWONK is entitled to 1/100 of a vote per share.

•

The Adjournment Proposal requires the approval of the holders of a majority of the aggregate voting power of the shares of LSXMA, LSXMB, BATRA, BATRB, FWONA and FWONB outstanding as of the record date, in each case, entitled to vote and that are present in person or by proxy at the special meeting, voting together as a single class. Pursuant to Liberty Media’s certificate of incorporation, with respect to the Adjournment Proposal, each holder of record of LSXMA, BATRA or FWONA is entitled to one vote per share and each holder of record of LSXMB, BATRB or FWONB is entitled to ten votes per share.

​

The Liberty Media board of directors has approved and declared advisable each enumerated proposal, and the transactions contemplated by each of them, and recommends that the holders of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK vote “FOR” each of them, as applicable.

 

7

 

Liberty Media is seeking approval from holders of BATRA, BATRB and (for certain proposals) BATRK of each of the proposals described above, including the Split-Off Proposal, the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal. You are encouraged to vote “FOR” all of the proposals presented and further described in the accompanying joint proxy statement/prospectus.

Liberty Media is seeking approval from holders of LSXMA, LSXMB, LSXMK, BATRA, BATRB, BATRK, FWONA, FWONB and FWONK of each of the Reclassification Proposals, including the Tracking Stock Proposal, the Liberty SiriusXM Group Recapitalization Proposal and the Formula One Group Recapitalization Proposal. You are encouraged to vote “FOR” each of the Reclassification Proposals presented and further described in the accompanying joint proxy statement/prospectus.

A list of stockholders entitled to vote at the special meeting will be available at Liberty Media’s offices in Englewood, Colorado for review by its stockholders for any purpose germane to the special meeting for at least 10 days prior to the special meeting.

You may cast your vote electronically during the Liberty Media special meeting via the Internet or by proxy prior to the meeting via the Internet, by telephone, or by mail. You may attend the special meeting, access the stockholders list, submit questions and vote your shares electronically during the meeting via the Internet by visiting www.virtualshareholdermeeting.com/[                 ]. To enter the special meeting, you will need the 16-digit control number that is printed in the box marked by the arrow on your proxy card. We recommend logging in at least fifteen minutes before the meeting to ensure that you are logged in when the meeting starts. Online check-in will start shortly before the meeting on [                 ].

YOUR VOTE IS IMPORTANT. Liberty Media urges you to vote as soon as possible by telephone, Internet or mail.

By order of the board of directors,

Michael Hurelbrink
Assistant Vice President and Secretary

Englewood, Colorado
[        ]

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE VOTE PROMPTLY VIA TELEPHONE OR ELECTRONICALLY VIA THE INTERNET. ALTERNATIVELY, PLEASE COMPLETE, SIGN AND RETURN BY MAIL THE ENCLOSED PROXY CARD.

 

8

 

ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information from other documents that are not included in or delivered with this joint proxy statement/prospectus. For a listing of the documents incorporated by reference into this joint proxy statement/prospectus, see “Additional Information — Where You Can Find More Information.” This information is available to you without charge upon your written or oral request. You can obtain copies of documents filed by Liberty Media with the Securities and Exchange Commission (the SEC), including the documents incorporated by reference in this joint proxy statement/prospectus, through the SEC website at www.sec.gov or by contacting Liberty Media by writing or telephoning the office of Investor Relations:

Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5400

If you would like to request any documents, please do so at least five business days before the date of the special meeting, in order to receive them before the special meeting.

We are not incorporating the contents of the websites of the SEC, Liberty Media, or any other entity into this joint proxy statement/prospectus. We are providing the information about how you can obtain certain documents that are incorporated by reference into this joint proxy statement/prospectus at these websites only for your convenience.

 

9

 

TABLE OF CONTENTS

 

10

 

 

11

 

 

12

 

*

To be filed by amendment.

​

 

13

 

This joint proxy statement/prospectus describes the businesses and assets of SplitCo as though they were its businesses and assets for all historical periods described. However, SplitCo is a newly formed entity that will not have conducted any operations prior to the Split-Off and instead will have had such businesses and assets transferred to it prior to the Split-Off. References in this joint proxy statement/prospectus to the historical assets, liabilities, businesses or activities of SplitCo’s businesses or the businesses in which it has interests are intended to refer to the historical assets, liabilities, businesses or activities as they were conducted or held by Liberty Media prior to the Split-Off. Upon completion of the Split-Off, SplitCo will be an independent, publicly traded company, and following the Liberty Media Exchange (defined below) and the Formula One Distribution (defined below), Liberty Media will have no continuing stock ownership in SplitCo. The historical combined financial information of SplitCo as part of Liberty Media contained in this joint proxy statement/prospectus is not necessarily indicative of SplitCo’s future financial position, future results of operations or future cash flows, nor does it reflect what the financial position, results of operations or cash flows of SplitCo would have been had it been operated as a stand-alone company during the periods presented.

You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than the date set forth on the cover page of this joint proxy statement/​prospectus. Changes to the information contained herein may occur after that date and neither SplitCo nor Liberty Media undertake any obligation to update the information unless required to do so by law.

None of the Office of the Commissioner of Baseball (the BOC or MLB or Major League Baseball), any of the member clubs of the BOC or their affiliates (other than Liberty Media and its affiliates as described herein), or any of their respective owners, officers, directors, members, managers, employees or representatives make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in, or assume any liability for any inaccuracies in or omissions from, this joint proxy statement/prospectus, or any of the transactions discussed herein.

 

14

 

​

15

 

​

16

 

17

 

​

18

 

​

19

 

20

 

​

21

 

​

22

 

​

23

 

​

24

 

25

 

26

 

27

 

28

 

29

 

30

 

31

 

​

32

 

​

33

 

34

 

35

 

36

 

37

 

​

38

 

39

 

​

40

 

​

41

 

​

42

 

​

43

 

44

 

​

​

​

Liberty SiriusXM common stock Series B (LSXMB)

​

​

​

​

High

​

​

Low

​

2021

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

47.42

​

​

​

​

​

42.06

​

​

Second Quarter

​

​

​

$

51.70

​

​

​

​

​

43.68

​

​

Third Quarter

​

​

​

$

52.10

​

​

​

​

​

45.70

​

​

Fourth Quarter

​

​

​

$

58.13

​

​

​

​

​

48.08

​

​

2022

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

53.04

​

​

​

​

​

44.92

​

​

Second Quarter

​

​

​

$

47.14

​

​

​

​

​

40.00

​

​

Third Quarter

​

​

​

$

46.75

​

​

​

​

​

36.50

​

​

Fourth Quarter

​

​

​

$

47.43

​

​

​

​

​

39.03

​

​

2023

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

42.00

​

​

​

​

​

25.35

​

​

​

​

​

Liberty Braves common stock Series B (BATRB)

​

​

​

​

High

​

​

Low

​

2021

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

31.00

​

​

​

​

​

26.25

​

​

Second Quarter

​

​

​

$

34.00

​

​

​

​

​

31.00

​

​

Third Quarter

​

​

​

$

29.00

​

​

​

​

​

26.00

​

​

Fourth Quarter

​

​

​

$

45.00

​

​

​

​

​

27.00

​

​

2022

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

28.61

​

​

​

​

​

26.05

​

​

Second Quarter

​

​

​

$

27.50

​

​

​

​

​

26.80

​

​

Third Quarter

​

​

​

$

30.01

​

​

​

​

​

25.40

​

​

Fourth Quarter

​

​

​

$

35.00

​

​

​

​

​

29.75

​

​

2023

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

48.00

​

​

​

​

​

36.00

​

​

45

 

​

​

​

Liberty Formula One common stock Series B (FWONB)

​

​

​

​

High

​

​

Low

​

2021

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

43.10

​

​

​

​

​

43.02

​

​

Second Quarter

​

​

​

$

43.93

​

​

​

​

​

38.75

​

​

Third Quarter

​

​

​

$

52.00

​

​

​

​

​

42.40

​

​

Fourth Quarter

​

​

​

$

56.70

​

​

​

​

​

49.33

​

​

2022

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

54.75

​

​

​

​

​

54.75

​

​

Second Quarter

​

​

​

$

70.26

​

​

​

​

​

56.65

​

​

Third Quarter

​

​

​

$

63.00

​

​

​

​

​

53.59

​

​

Fourth Quarter

​

​

​

$

48.75

​

​

​

​

​

47.78

​

​

2023

​

​

​

​

​

​

​

​

​

​

​

​

​

First Quarter

​

​

​

$

68.02

​

​

​

​

​

54.31

​

​

46

 

RISK FACTORS

In addition to the other information contained in, incorporated by reference in or included as an Annex to this joint proxy statement/prospectus, you should carefully consider the following risk factors in deciding whether to vote to approve the Split-off Proposal and the Reclassification Proposals.

The risk factors described in this section have been separated into two groups:

•

risks that relate to the Split-Off Proposal, which include risks relating to SplitCo’s corporate history and the Split-Off, risks relating to SplitCo’s business and risks relating to an investment in SplitCo common stock; and

​

•

risks that relate to the Reclassification Proposal, which include risks relating to an investment in Liberty Media common stock due to its tracking stock capitalization, risks relating to Liberty Media as a whole and risks relating to the businesses to be attributed to the New Liberty SiriusXM Group, New Formula One Group and Liberty Live Group.

​

The risks described below and elsewhere in this joint proxy statement/prospectus are considered to be the most material but are not the only ones that relate to the Split-Off and to the Reclassification. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that also could have material adverse effects on SplitCo, Liberty Media or on an investment in any of its groups of common stock. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods especially given the current economic environment.

If any of the events described below were to occur, the businesses, prospects, financial condition, results of operations and/or cash flows to be attributed to SplitCo or to the New Liberty SiriusXM Group, the New Formula One Group, or the Liberty Live Group could be materially adversely affected. In any such case, the price of any or all of the SplitCo common stock and/or any of Liberty Media’s New Liberty SiriusXM common stock, the New Liberty Formula One common stock or the Liberty Live common stock could decline, perhaps significantly. For the purposes of the risk factors relating to the Split-Off enumerated below, unless the context otherwise indicates, Liberty Media has assumed that the Split-Off Proposal is approved and that the Split-Off has been completed, and for the purposes of the risk factors relating to the Reclassification enumerated below, unless the context otherwise indicates, Liberty Media has assumed that the Reclassification Proposal is approved and that the Reclassification has been completed.

Factors Relating to the Split-Off Proposal

Factors Relating to SplitCo’s Corporate History and the Split-Off

The historical financial information of SplitCo included in this joint proxy statement/prospectus is not necessarily representative of SplitCo’s future financial position, future results of operations or future cash flows.

In valuing shares of SplitCo common stock, investors should recognize that the historical financial information of SplitCo included in this joint proxy statement/prospectus has been extracted from Liberty Media’s historical consolidated financial statements and does not necessarily reflect what SplitCo’s results of operations, financial condition and cash flows would have been had it been a separate, stand-alone company pursuing independent strategies during the periods presented.

SplitCo may incur material costs as a result of its separation from Liberty Media.

SplitCo will incur costs and expenses not previously incurred as a result of the Split-Off. These increased costs and expenses may arise from various factors, including financial reporting, costs associated with complying with the federal securities laws (including compliance with the Sarbanes-Oxley Act), tax administration and human resources related functions. Although Liberty Media will continue to provide many of these services for SplitCo under the Services Agreement, neither SplitCo nor Liberty Media can assure you that the Services Agreement will continue or that these costs will not be material to SplitCo’s business.

 

47

 

SplitCo’s inter-company agreements are being negotiated while it is still a subsidiary of Liberty Media.

SplitCo will enter into a number of inter-company agreements covering matters such as tax sharing and allocation of responsibility for certain liabilities previously undertaken by Liberty Media for certain of SplitCo’s businesses. In addition, SplitCo will enter into the Services Agreement with Liberty Media pursuant to which Liberty Media will provide SplitCo certain management, administrative, financial, treasury, accounting, tax, legal and other services, for which SplitCo will reimburse Liberty Media on a fixed fee basis. The terms of all of these agreements are being established while SplitCo is a wholly-owned subsidiary of Liberty Media, and therefore may not be the result of arms’ length negotiations. SplitCo believes that the terms of these inter-company agreements are and will be commercially reasonable and fair to all parties under the circumstances; however, conflicts could arise in the interpretation or any extension or renegotiation of the foregoing agreements after the Split-Off. See “Certain Relationships and Related Party Transactions — Relationships between SplitCo and Liberty Media.”

SplitCo has no operating history as a separate company upon which you can evaluate its performance.

Although the business of SplitCo has been operated as a separate tracking stock group of Liberty Media, SplitCo does not have an operating history as a separate public company. Accordingly, there can be no assurance that its business will be successful on a long-term basis. SplitCo may not be able to grow its businesses as planned and may not be profitable.

SplitCo may have a significant indemnity obligation to Liberty Media, which is not limited in amount or subject to any cap, if the Split-Off Transactions are treated as a taxable transaction.

Pursuant to the Tax Sharing Agreement that SplitCo and Liberty Media will enter into in connection with the Split-Off, SplitCo will be required to indemnify Liberty Media, its subsidiaries and certain related persons for taxes and certain losses resulting from the failure of the Split-Off Transactions to qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code and certain taxes resulting from the failure of the Liberty Media Exchange to qualify as a transaction described in Section 361(c)(3) of the Code, to the extent that such taxes and losses (i) result primarily from, individually or in the aggregate, the breach of certain covenants made by SplitCo (applicable to actions or failures to act by SplitCo and its subsidiaries following the completion of the Split-Off), (ii) result from the application of Section 355(e) of the Code to the Split-Off Transactions as a result of the treatment of the Split-Off Transactions as part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50% or greater interest (measured by vote or value) in the stock of SplitCo (or any successor corporation) or (iii) result from any excess loss account (within the meaning of applicable U.S. Treasury Regulations) in the SplitCo common stock, or gain recognized under Section 361(b) due to the application of the basis limitation in the last sentence of Section 361(b)(3) of the Code.

SplitCo’s indemnification obligations to Liberty Media, its subsidiaries and certain related persons will not be limited in amount or subject to any cap. If SplitCo is required to indemnify Liberty Media, its subsidiaries or such related persons under the circumstances set forth in the Tax Sharing Agreement, SplitCo may be subject to substantial liabilities, which could materially adversely affect its financial position.

For a more detailed discussion of the Tax Sharing Agreement, see “Certain Relationships and Related Party Transactions — Agreements Relating to the Split-Off — Tax Sharing Agreement.”

SplitCo may determine to forgo certain transactions in order to avoid the risk of incurring significant tax-related liabilities.

Under the Tax Sharing Agreement, SplitCo will agree not to take any action, or fail to take any action, following the Split-Off, which action or failure to act is inconsistent with the Split-Off Transactions qualifying for tax-free treatment under Section 355, Section 368(a)(1)(D) and related provisions of the Code. Further, the Tax Sharing Agreement will require that SplitCo generally indemnify Liberty Media for taxes and certain losses resulting from the failure of the Split-Off Transactions to qualify as a tax-free transaction and certain taxes resulting from the failure of the Liberty Media Exchange to qualify as a transaction described in Section 361(c)(3) of the Code, that are incurred by Liberty Media (or its subsidiaries) to the extent that such taxes and losses (i) result primarily from, individually or in the aggregate, the breach of certain covenants

 

48

 

made by SplitCo (applicable to actions or failures to act by SplitCo and its subsidiaries following the completion of the Split-Off), (ii) result from the application of Section 355(e) of the Code to the Split-Off Transactions as a result of the treatment of the Split-Off Transactions as part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50% or greater interest (measured by vote or value) in the stock of SplitCo (or any successor corporation) or (iii) result from any excess loss account (within the meaning of applicable U.S. Treasury Regulations) in the SplitCo common stock, or gain recognized under Section 361(b) due to the application of the basis limitation in the last sentence of Section 361(b)(3) of the Code.

Under Section 355(e) of the Code, an acquisition of SplitCo’s stock would generally be presumed to be part of a plan (or series of related transactions) with the Split-Off Transactions if such acquisition occurs within two years before or after the Split-Off (or if such stock is received in the Split-Off in exchange for Liberty Braves common stock or as a distribution on Liberty Formula One common stock that was acquired within the two years before the Split-Off). This presumption, however, may be rebutted based upon an analysis of the facts and circumstances related to the Split-Off Transactions and the particular acquisition in question, including a weighing of certain plan and non-plan factors set forth in Treasury Regulations promulgated under Section 355(e) of the Code. Further, these Treasury Regulations provide certain safe harbors under which an acquisition will be deemed not to be part of a plan (or series of related transactions) with the Split-Off for purposes of Section 355(e) of the Code.

In light of the requirements under Section 355 of the Code, including the factors and safe harbors described above, SplitCo may determine to forgo certain transactions that might otherwise be advantageous. In particular, SplitCo may determine to continue to operate certain of its business operations for the foreseeable future even if a sale of such business operations might otherwise be advantageous. Moreover, in light of the requirements of Section 355(e) of the Code, SplitCo might determine to forgo certain transactions, including share repurchases, stock issuances, certain asset dispositions and other strategic transactions, for some period of time following the Split-Off. In addition, SplitCo’s indemnity obligation under the Tax Sharing Agreement might discourage, delay or prevent its entering into a change of control transaction for some period of time following the Split-Off Transactions.

The Split-Off Transactions could result in significant tax liability.

The Split-Off is conditioned upon the receipt by Liberty Media of the opinion of Skadden Arps, tax counsel to Liberty Media, to the effect that, among other things, the Split-Off Transactions will qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D), and related provisions of the Code to Liberty Media and to holders of Liberty Braves common stock and Liberty Formula One common stock (except with respect to the receipt of any cash in lieu of fractional shares). The condition to the Split-Off relating to the receipt by Liberty Media of the opinion of Skadden Arps may not be waived.

The opinion of Skadden Arps will be based on the law in effect as of the time of the Split-Off and will rely on certain assumptions, as well as statements, representations, and undertakings made by officers of Liberty Media and certain other individuals. If any of those statements, representations, or assumptions is incorrect or untrue in any material respect or any of those undertakings is not complied with, or if the facts upon which the opinions of Skadden Arps are based are materially different from the actual facts that exist at the time of the Split-Off, the conclusions reached in such opinion could be adversely affected. Liberty Media will not obtain a private letter ruling from the IRS regarding the qualification of the Split-Off as a tax-free transaction under Section 355, Section 368(a)(1)(D), and related provisions of the Code. The legal authorities on which the opinion of Skadden Arps will be based are subject to change or differing interpretations at any time, possibly with retroactive effect. Opinions of counsel are not binding on the IRS or the courts, and there can be no assurance that the IRS will not challenge the conclusions reached in such opinion or that a court would not sustain such a challenge. If, for any reason, it is subsequently determined that the Split-Off Transactions do not qualify for tax-free treatment, Liberty Media and the holders of Liberty Braves common stock and Liberty Formula One common stock who receive SplitCo common stock pursuant to the Split-Off Transactions could incur significant tax liabilities. For a more complete discussion of the tax opinion and the tax consequences if the Split-Off Transactions are not tax-free, please see “U.S. Federal Income Tax Consequences — Tax Opinions” and “— U.S. Federal Income Tax Treatment of the Split-Off.”

 

49

 

Even if the Split-Off Transactions otherwise qualify under Section 355, Section 368(a)(1)(D), and related provisions of the Code, the Split-Off Transactions would result in a significant U.S. federal income tax liability to Liberty Media (but not to holders of Liberty Braves common stock or Liberty Formula One common stock) under Section 355(e) of the Code if one or more persons acquire, directly or indirectly, a 50% or greater interest (measured by either vote or value) in the stock of Liberty Media or in the stock of SplitCo (or any successor corporation) (excluding, for this purpose, the acquisition of SplitCo common stock by holders of Liberty Braves common stock and Liberty Formula One common stock in the Split-Off Transactions) as part of a plan or series of related transactions that includes the Split-Off Transactions. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual in nature, and subject to a comprehensive analysis of the facts and circumstances of the particular case. Notwithstanding the opinion of Skadden Arps described above, Liberty Media or SplitCo might inadvertently cause or permit a prohibited change in the ownership of Liberty Media or SplitCo to occur. If the Split-Off Transactions were determined to be taxable to Liberty Media under Section 355(e) of the Code, Liberty Media would incur significant tax liabilities. For a more complete discussion of the tax consequences if the Split-Off Transactions are determined to be taxable to Liberty Media under Section 355(e) of the Code, please see “U.S. Federal Income Tax Consequences — U.S. Federal Income Tax Treatment of the Split-Off.”

SplitCo and/or Liberty Media may not realize the potential benefits from the Split-Off in the near term or at all.

Liberty Media anticipates the realization of strategic and financial benefits to SplitCo and Liberty Media as a result of the separation of SplitCo from Liberty Media. See “The Proposed Transactions —  Reasons for the Split-Off and the Reclassification.” In particular, Liberty Media believes that the Split-Off will benefit Liberty Media and its businesses and result in the creation of stockholder value because, among other things, the aggregate trading value of SplitCo’s common stock and Liberty Media’s common stock is expected to exceed the aggregate trading value of Liberty Media’s existing common stock, although there can be no assurance that this will occur. Accordingly, there can be no assurance that the market will react favorably to the Split-Off, that the Split-Off will result in a trading price of the SplitCo common stock that reflects a reduced valuation discount than that currently applied to the Liberty Braves common stock or that the trading discount currently associated with the Liberty SiriusXM common stock will be reduced. In this case, SplitCo’s equity currency would not be as attractive to use for raising capital to fund its financial needs or for the retention and attraction of qualified personnel. Furthermore, Liberty Media may not experience the anticipated reduction in dilution to its stockholders when using its common stock for purposes of making strategic acquisitions and other capital raising initiatives and for retention and attraction of qualified personnel. Given the added costs associated with the completion of the Split-Off, including the separate accounting, legal and other compliance costs of being a separate public company, the failure of SplitCo and/or Liberty Media to realize the anticipated benefits of the Split-Off in the near term or at all could adversely affect their respective companies.

SplitCo may have overlapping directors and management with Liberty Media, which may lead to conflicting interests.

Executive officers of Liberty Media will also serve as executive officers of SplitCo pursuant to the Services Agreement that will be entered into between Liberty Media and SplitCo in connection with the completion of the Split-Off, and Gregory B. Maffei, President and Chief Executive Officer and a director of Liberty Media will also serve as the Chairman of the Board of SplitCo. The executive officers and the members of SplitCo’s board of directors will have fiduciary duties to its stockholders. Likewise, any such persons who serve in similar capacities at Liberty Media have fiduciary duties to its stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting their respective companies. For example, there may be the potential for a conflict of interest when SplitCo or Liberty Media looks at acquisitions and other corporate opportunities that may be suitable for each of them. Further, as allowed by Nevada law, the SplitCo restated charter will renounce any interest or expectancy in certain business opportunities involving directors and officers of SplitCo, which will allow such directors and officers to pursue those business opportunities without being liable to SplitCo or its stockholders for a breach of fiduciary duties arising out of such opportunities. Moreover, SplitCo’s Chairman of the Board and its officers will continue to own Liberty Media common

 

50

 

stock, restricted stock units and options to purchase Liberty Media common stock. These ownership interests could create, or appear to create, potential conflicts of interest when these individuals are faced with decisions that could have different implications for SplitCo or Liberty Media. Any potential conflict that could qualify as a “related party transaction” ​(as defined in Item 404 of Regulation S-K) will be subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines. Any other potential conflicts that arise would be addressed on a case-by-case basis, keeping in mind the applicable fiduciary duties owed by the executive officers and directors of each issuer. From time to time, Liberty Media or its respective affiliates may enter into transactions with SplitCo and/or its subsidiaries or other affiliates. Although the terms of any such transactions or agreements will be established based upon negotiations between employees of the companies involved, there can be no assurance that the terms of any such transactions will be as favorable to SplitCo or its subsidiaries or affiliates as would be the case where the parties are completely at arms’ length.

It is expected that Mr. Malone will own shares of SplitCo common stock representing approximately [      ]% of the aggregate voting power of SplitCo, which may be deemed to put him in a position to influence significant corporate actions and may discourage others from initiating a potential change of control transaction that may be beneficial to SplitCo stockholders.

As of [   ], Mr. Malone beneficially owned shares of Liberty Braves common stock representing the power to direct approximately [   ]% of the aggregate voting power of the Liberty Braves common stock and immediately following the Split-Off, Mr. Malone is expected to beneficially own shares of SplitCo common stock (assuming the issuance of [   ] shares of New BATRA and [   ] shares of New BATRB based on (i) the exchange of [   ] shares of BATRA and [   ] shares of BATRB outstanding as of [   ], (ii) the issuance of [   ] shares of New BATRA in connection with the settlement and extinguishment of 1,811,066 notional shares representing the intergroup interest in the Braves Group attributed to the Liberty SiriusXM Group as of December 31, 2022, and (iii) the assumption that no shares of BATRB are converted into shares of BATRA prior to the Split-Off) representing the power to direct approximately [   ]% of the aggregate voting power of the SplitCo common stock. Furthermore, although Mr. Malone is a party to the Liberty Media Exchange Agreement whereby, among other things, Mr. Malone agreed to an arrangement under which his aggregate voting power in Liberty Media would not exceed 49% plus 0.5% (under certain circumstances), Mr. Malone is not expected to be an officer or director of SplitCo, thus, pursuant to the terms of the Liberty Media Exchange Agreement, SplitCo and Mr. Malone will not be required to and are not expected to enter into such an arrangement in connection with the Split-Off, and therefore Mr. Malone could acquire beneficial ownership of [   ] additional shares of New BATRA or [   ] additional shares of New BATRB to control approval of general matters submitted to shareholders for approval, pursuant to which holders of shares of New BATRA and New BATRB would vote together as a single class. Immediately following the Split-Off, Mr. Malone will own [   ] shares of New BATRA and [   ] shares of New BATRB (estimated based on the number of shares of Liberty Braves common stock held by Mr. Malone as of [   ]), and therefore, it is expected that Mr. Malone may continue to be deemed to be in a position to influence significant corporate actions, including corporate transactions such as mergers, business combinations or dispositions of assets. This concentration of ownership could discourage others from initiating any potential merger, takeover or other change of control transaction that may otherwise be beneficial to SplitCo stockholders.

Liberty Media’s board of directors may abandon the Split-Off at any time, or its board of directors may determine to amend the terms of any agreement Liberty Media enters into relating to the Split-Off.

No assurance can be given that the Split-Off will occur, or if it occurs that it will occur on the terms described in this joint proxy statement/prospectus. In addition to the conditions to the Split-Off described herein (one of which may be waived by the Liberty Media board of directors in its sole discretion), the Liberty Media board of directors may abandon the Split-Off at any time prior to the effective time of the Split-Off (the Split-Off effective time) for any reason or for no reason. Additionally, the agreements to be entered into by SplitCo with Liberty Media in connection with the Split-Off (including the Reorganization Agreement, the Tax Sharing Agreement, the Services Agreement, the Facilities Sharing Agreement and the aircraft time sharing agreements) may be amended or modified prior to the Split-Off effective time in the sole discretion of Liberty Media, as applicable. If any condition to the Split-Off is waived or if any material amendments or modifications are made to the terms of the Split-Off or to such ancillary agreements prior to the Split-Off,

 

51

 

Liberty Media intends to promptly issue a press release and file a Current Report on Form 8-K informing the market of the substance of such waiver, amendment or modification.

Factors Relating to SplitCo’s Business

The financial success of SplitCo will depend, in large part, on the Braves achieving on-field success.

The financial results of SplitCo depend in large part on the ability of the Braves to achieve on-field success. The team’s successes generate significant fan enthusiasm, resulting in sustained ticket, premium seating, concession and merchandise sales, and greater shares of local television and radio audiences during that period. Furthermore, participation in MLB’s postseason provides the franchise with additional revenue and income. Additional revenue and income in the postseason are derived primarily from postseason games played at the Braves’ home stadium. Although the Braves did not generate material revenue from participation in the 2020 postseason since games were played without fans in attendance due to COVID-19, the Braves appeared in 16 out of 16 potential postseason games in 2021 and 4 out of 17 potential postseason games in 2022. Potential postseason games do not include games played in the National League Wild Card Series, in which the Braves were not eligible to participate because of their high seeding in the National League. Net revenue from postseason play (after reduction for allocable postseason share payments) was approximately $8.4 million and $67.8 million in 2022 and 2021, respectively. While the Braves have made the MLB postseason during seven of the past eleven seasons, and were the 2021 World Series Champions, there can be no assurance that the team will perform well or qualify for postseason play during the next season or any season thereafter. Poor on-field performance by the Braves is likely to adversely affect the financial performance of SplitCo.

The success of the Braves will depend largely on their ability to develop, obtain and retain talented players.

The success of the Braves depends, in large part, on the ability to develop, obtain and retain talented players. The Braves compete with other MLB baseball teams and teams in other countries for available professional players and top player prospects. There can be no assurance that the Braves will be able to retain players upon expiration of their contracts or identify and obtain or develop new players of adequate talent to replace players who retire or are injured, traded, released or lost to free agency. Even if the Braves are able to retain or obtain players who have had successful amateur or professional careers, or develop talented players through the Braves’ minor league affiliates or otherwise, there can be no assurance that such players will perform successfully for the Braves. The 2017 penalties handed down by MLB against the Braves in the international market limited the Braves’ ability to recruit players internationally through the 2021 season, and could have an impact on the future pipeline of talent going forward.

Determining the market value of an MLB player is difficult, subject to market conditions and involves the use of subjective inputs and significant assumptions, any of which may prove to be inaccurate.

The current market value of a given MLB player is subject to market conditions generally and more specifically based on the player’s experience, position played, recent performance statistics, physical health, other similar players available at such time and other factors, such as the desirability of a particular franchise to such player, all of which vary over time. In general, player signings occur frequently enough that there are comparable objective data points that can be utilized in determining the value of a given MLB player. However, for top-ranked players, there may not be frequent enough player signings to provide sufficient recent comparable objective data points for valuation purposes. As a result, the Braves’ ability to accurately determine the market value of a given player may be significantly impacted by Braves’ subjective inputs and assumptions. Further, while a player’s market value is generally determined at the time of signing, the evaluation of the contributions made by the player are ongoing throughout the life of the contract and the overall value of the entire contract can be analyzed only after the expiration of such contract. As a result, the Braves’ ability to determine the market value of an MLB player is inherently uncertain, and the Braves may fail to assign a market value that is commensurate with such player’s contributions over the life of the contract term. These challenges, and the related risk that the Braves may fail to accurately determine the market value of a given player, may be exacerbated as the length of the contract term increases. As a result, entry into long-term contracts, which generally include higher aggregate compensation, may increase the risk that the Braves fail to accurately determine the market value of a given player. The Braves’ inability

 

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to accurately determine the market value of the players who are signed may negatively impact the ability of the Braves to achieve on-field success, which is likely to adversely affect the financial performance of SplitCo.

The risk of injuries to key or popular players creates uncertainty and could negatively impact financial results.

A significant portion of the financial results of SplitCo will be dependent upon the on-field success of the Braves and injuries to players pose risk to that success. In addition, the Braves are currently scheduled to play 81 regular season road games each year, requiring players and members of the coaching staff to travel using charter carriers. The Braves’ extensive travel schedule exposes its players and coaching staff to the risk of travel-related accidents and injuries. An injury sustained by a key player, or an injury occurring at a key point in the season, could negatively impact the team’s performance and decrease the likelihood of postseason play. An injury sustained by a popular player could negatively impact fan enthusiasm, which could negatively impact ticket sales and other sources of revenue. Furthermore, after the start of each season, all MLB players under contract are generally entitled to all of their contract salary for the season, even after sustaining an injury (subject to certain rights of the Braves). Having to compensate a player who is unable to perform for a substantial period of the season, as well as the replacement for the injured player, could create a significant financial burden for the Braves. Long-term employment contracts provide for, among other items, annual compensation for certain players (current and former) and other employees. Amounts due under such contracts as of December 31, 2022 aggregated $867.5 million, which is payable as follows: $183.8 million in 2023, $131.7 million in 2024, $115.0 million in 2025, $114.0 million in 2026, $90.0 million in 2027 and $233.0 million thereafter. The Braves may or may not elect to obtain disability insurance for their players signed to multiyear contracts to partially mitigate these risks, but there can be no assurance that even if obtained that such insurance will compensate for all or substantially all of the costs associated with player injuries and such insurance would not serve to mitigate any potential negative impact on the team’s performance and revenue.

Focus on team performance, and decisions by management, may negatively impact financial results in the short-term.

Management of Braves Holdings focuses on making operational and business decisions that enhance the on-field performance of the Braves and this may sometimes require implementing strategies and making investments that may negatively impact short-term profit for the sake of immediate on-field success. For example, in order to improve the short-term performance of the team, management may decide to make trades for highly compensated players and sign free agents or current players to high value contracts, which could significantly increase operating expenses for a given year, and which could adversely impact the trading price of the SplitCo common stock. In addition, to the extent higher salaries must be paid in order to retain talented players, the Braves may be subject to the Competitive Balance Tax imposed by the CBA (each as defined below) if the Braves’ aggregate average payroll exceeds the predetermined thresholds contained in the CBA. For more information about the Competitive Balance Tax, see “Description of SplitCo’s Business — MLB Rules and Regulations — Collective Bargaining Agreement — Competitive Balance Provisions.” Alternatively, management may decide to focus on longer-term success by investing more heavily in the recruiting and development of younger and less expensive talent, which may negatively affect the team’s current on-field success and in turn could have a negative impact on ticket sales and other sources of revenue. SplitCo must also comply with all MLB rules and decisions, which has significant authority over MLB teams and must act in the best interests of MLB as a whole. Such rules and decisions may be inconsistent with strategies adopted by management and may have a negative effect on the near-term value of SplitCo common stock.

The organizational structure of MLB and its rules and regulations impose substantial restrictions on the operations of SplitCo and its subsidiaries.

As a condition to maintaining its MLB membership, each MLB Club must comply with the rules and regulations adopted by MLB, as well as a series of other agreements and arrangements that govern the operation and management of an MLB Club (collectively, the MLB Rules and Regulations). See “Description of SplitCo’s Business — MLB Rules and Regulations.” For example, each MLB Club is subject to the Major League Constitution, the Major League Rules and the CBA. In addition, each MLB Club is required

 

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to appoint one “Control Person” who is acceptable to MLB and the other MLB Clubs and who has significant authority over club operations and the club’s interaction with MLB. Pursuant to the MLB Rules and Regulations and the CBA, an MLB Club must comply with, among other things, limitations on the amount of debt it can incur, revenue sharing arrangements with other MLB Clubs, commercial arrangements with regard to the national broadcasting of its games and other programming and commercial arrangements relating to the use of its intellectual property. Additionally, the vote of 75% of the MLB Clubs is required for the approval of the sale of any MLB Club or relocation of a franchise to another city.

The Braves will be required to abide by any changes to the MLB Rules and Regulations and the adoption of any new MLB Rules and Regulations, irrespective of whether such changes or new arrangements negatively impact the Braves, proportionately or disproportionately, as compared with the other MLB Clubs. Further, the Commissioner of Baseball interprets the MLB Rules and Regulations, and Braves Holdings (and certain of its affiliates) has agreed to submit any and all disputes related to the MLB Rules and Regulations, or disputes involving another MLB Club, to the Commissioner of Baseball as sole arbitrator. The decisions of the Commissioner of Baseball are binding and not appealable, and therefore Braves Holdings may not resort to the courts or any other means to enforce its rights or contest the application of the MLB Rules and Regulations. No assurance can be given that any changes to the MLB Rules and Regulations, adoption of new MLB Rules and Regulations or decisions made by the Commissioner of Baseball will not adversely affect SplitCo and its financial results and have a negative impact upon the value of the SplitCo common stock.

Organized labor matters could have an adverse effect on SplitCo’s financial results.

SplitCo’s business is dependent upon the efforts of unionized workers. MLB players are covered by the CBA. MLB has experienced labor difficulties in the past and may have labor issues in the future. Labor difficulties may include players’ strikes or protests or management lockouts. MLB has also had disputes with the labor union representing the major league umpires, which have resulted in strikes and the need to use replacement umpires. MLB experienced a players strike during the 1994 season, which resulted in a regular season that was shortened and the cancelation of the World Series. In December 2021, the previous collective bargaining agreement expired and MLB commenced a lockout of the Major League players. As a result of the lockout, the start of the 2022 regular season was delayed until the MLB Clubs reached a tentative agreement in March 2022 on the terms of the CBA in a Memorandum of Understanding and the regular season began in April. See “Description of SplitCo’s Business — MLB Rules and Regulations —  Collective Bargaining Agreement.” The CBA covers the 2022 through 2026 MLB seasons. Any labor disputes, such as players’ strikes, protests or lockouts, could postpone or cancel MLB games. No revenue will be recognized for cancelled games and the impact may have a material negative effect on SplitCo’s business and results of operations.

The possibility of MLB expansion could create increased competition.

The most recent MLB expansion occurred in 1998. MLB continues to evaluate opportunities to expand into new markets across North America. Because revenue from national broadcasting and licensing agreements are divided equally among all MLB Clubs, any such expansion could dilute the revenue realized by SplitCo from such agreements and increase competition for talented players among MLB Clubs. Historically, expansion teams have been permitted to select in an expansion draft certain unprotected players from the rosters of various MLB teams. There can be no assurance that the Braves will be able to retain key players during future expansion drafts or that the rules regarding expansion drafts will not change to the detriment of the Braves. Any expansion in the Southeast region of the United States, in particular, could also draw fan, consumer and viewership interest away from the Braves.

Viewership, and interest in baseball generally, may fluctuate due to factors outside of SplitCo’s control.

Viewership of professional baseball has decreased in recent years and any future decline in television ratings or attendance for MLB as a whole could have an adverse effect on SplitCo’s financial results. The Braves compete for entertainment and advertising dollars with other sports and entertainment activities. During parts of the MLB regular season, the Braves experience competition from college football, professional basketball (the Atlanta Hawks) and professional football (the Atlanta Falcons). As sporting and

 

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entertainment trends change, fans may be drawn to other spectator sports and entertainment options, in spite of on-field success by the Braves.

Broadcasting rights, both national and local, present an important source of revenue for SplitCo, and decreases in this broadcasting revenue could have an adverse effect on SplitCo’s financial results.

Braves Holdings derives revenue directly from the sale of their local broadcasting rights through an individually negotiated carriage or license agreement. The sale of their national broadcasting rights, together with those of all other MLB Clubs, is organized through MLB with all such revenue allocated consistent with the MLB Rules and Regulations. A majority of this revenue is reliant on a limited number of broadcasting partners. Solvency and business disruptions impacting SplitCo’s broadcasting partners, as well as any decline in television ratings, carriage disputes, popularity of the Braves specifically, or even MLB as a whole, could adversely affect the revenue that can be derived from the sale of these broadcasting rights.

SplitCo’s ability to incur indebtedness to fund its operations will be limited, which could negatively impact its operations.

Braves Holdings generally funds its operating activities through cash flow from operations and two credit facilities, with a combined borrowing capacity of $275 million. As of December 31, 2022, there were no amounts outstanding under these credit facilities. If cash flows become insufficient to cover operating or capital needs, SplitCo may be required to take on additional indebtedness, but applicable CBA rules limit the aggregate amount of indebtedness that the Braves may incur. See “Description of SplitCo’s Business — MLB Rules and Regulations — Collective Bargaining Agreement — Debt Service Rule.” Following its separation from Liberty Media, SplitCo will not have access to Liberty Media’s capital or credit and its ability to obtain significant financing on favorable terms, or at all, may be more limited as a standalone company than as a subsidiary of Liberty Media. Due to its size and current indebtedness at its level, together with its assets and operating cash flow, SplitCo may be unable to support any significant financing in the future.

If debt financing is not available to SplitCo in the future, SplitCo may obtain liquidity through the issuance and sale of its equity securities. If additional funds are raised through the issuance of equity securities, SplitCo’s stockholders may experience significant dilution. If SplitCo is unable to obtain sufficient liquidity in the future, Braves Holdings may be unable to continue to develop its business, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on SplitCo’s business, financial condition and results of operations.

Certain covenants included in the documents governing indebtedness impose limitations on the liquidity of SplitCo.

In addition to the Debt Service Rule limitations imposed by the CBA limiting the amount of indebtedness that may be incurred by the Braves, the agreements governing the indebtedness incurred, directly or indirectly, by Braves Holdings, include certain covenants that limit the ability of SplitCo to sell or otherwise transfer control over certain assets or equity interests of affiliated entities. These covenants could limit the flexibility of SplitCo to react to changing or adverse market conditions, which could have an adverse effect on the financial condition of SplitCo and could suppress the value of the SplitCo common stock.

SplitCo’s holding company structure could restrict access to funds of its subsidiaries that may be needed to pay third party obligations.

SplitCo is a holding company and its assets consist primarily of its investments in its subsidiaries, including Braves Holdings. As a holding company, SplitCo’s ability to meet its financial obligations to third parties is dependent upon its available cash balances, distributions from subsidiaries and other investments and proceeds from any asset sales. Further, SplitCo’s ability to receive dividends or payments or advances from its subsidiaries’ businesses depends on their individual operating results, any statutory, regulatory or contractual restrictions to which they are or may become subject and the terms of their indebtedness and any additional debt they may incur in the future. From time to time, SplitCo’s subsidiaries may consider

 

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opportunities to refinance such debt, including through use of cash on hand and capital markets transactions. Accordingly, SplitCo’s ability to make payments to third parties and to otherwise meet its financial obligations at the holding company level is constricted.

SplitCo does not own Truist Park and any failure to comply with the terms of the Stadium Operating Agreement for Truist Park could result in the termination of SplitCo operating subsidiaries’ rights to operate, and play home games at, Truist Park, which could adversely impact the club’s reputation and SplitCo’s baseball business, financial condition and results of operations.

The Braves play their home games at Truist Park pursuant to the Stadium Operating Agreement entered into with Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority, which owns Truist Park (the Stadium Operating Agreement). The Stadium Operating Agreement obligates the Braves to play all home games in Truist Park through the 2046 season, with a 5-year extension option to 2051.

The Stadium Operating Agreement is terminable by Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority upon the occurrence of certain events of default, including, subject to certain exceptions and applicable cure periods: (i) failure of the Braves to pay any amount due and owing under the Stadium Operating Agreement, including the annual license fees, within ten business days after written notice; (ii) failure of the Braves to perform any material agreement or provision of the Stadium Operating Agreement; (iii) the Braves failure to guarantee certain other payment and performance obligations relating to the construction and maintenance of Truist Park; and (iv) failure by the Braves to play all home games at Truist Park. The Stadium Operating Agreement provides that any termination of the agreement will not be effective until the conclusion of the then current MLB season, including any applicable post-season games. The Stadium Operating Agreement also grants the Braves a right of first refusal in connection with any sale by Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority of their interests in Truist Park and provides the Braves with an exclusive option to purchase Truist Park during the twelve month period ending six months prior to the expiration or termination of the Stadium Operating Agreement.

If certain of SplitCo’s subsidiaries were to breach or become unable to satisfy their obligations under or relating to the Stadium Operating Agreement, such subsidiaries’ right to operate Truist Park, including their right to play home games at Truist Park, could be terminated. If the Stadium Operating Agreement is terminated, and the operating subsidiaries determine not to exercise their right of first refusal or exclusive option to purchase, or are unable to exercise such rights or unsuccessful in exercising such rights, there is no guarantee that SplitCo would be able to secure alternative facilities for the Braves without a significant disruption to its baseball business. Any termination of the Stadium Operating Agreement could adversely impact the club’s reputation and SplitCo’s baseball business, financial condition and results of operations.

SplitCo’s subsidiaries have incurred and are expected to continue to incur significant indebtedness, including borrowings used or to be used to finance the construction, development and/or ongoing operations of Braves Holdings, the Braves’ stadium, the Mixed-Use Development and a spring training facility, which could negatively impact SplitCo’s financial condition.

Braves Holdings has, directly or indirectly through subsidiaries, taken on a significant level of debt and increased expenses related to the development of the Braves’ stadium, its mixed-use development (the Mixed-Use Development) and its spring training facility. As of December 31, 2022, Braves Holdings had approximately $215.4 million outstanding under various debt instruments for construction and other stadium-related costs, $300.5 million outstanding under various credit facilities and loans for the Mixed-Use Development and $30 .0 million outstanding under a credit facility for the spring training facility. These construction and development expenditures will increase SplitCo’s costs and indebtedness in the near term, which could have a negative impact on Braves Holdings’ credit worthiness and the value of the SplitCo common stock.

The financial performance of SplitCo may be materially adversely affected if it does not experience the anticipated benefits of the Mixed-Use Development in the near term or at all.

Braves Holdings is incurring a significant amount of capital expenditures and indebtedness in connection with the construction and development of the Mixed-Use Development. Although SplitCo believes that the new stadium and mixed use development will result in a material increase in revenue over the short and

 

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long term, including as a result of increased game attendance and rental income from the Mixed-Use Development, no assurance can be given that attendance will increase as anticipated or that the potential benefits of the Mixed-Use Development will be fully realized. To the extent that the long-term anticipated benefits of the Mixed-Use Development do not materialize and SplitCo does not experience sustained revenue, SplitCo’s increased costs, including its new debt service obligations, could materially adversely affect SplitCo’s financial results, which is likely to suppress the value of the SplitCo common stock.

Development activities, such as those associated with the Mixed-Use Development, are subject to significant risks.

Risks associated with real estate development projects, such as the Mixed-Use Development, relate to, among other items, adverse changes in national market conditions (which can result from political, regulatory, economic or other factors), increases in interest rates, competition for, and the financial condition of, tenants, the cyclical nature of property markets, adverse local market conditions, changes in the availability of debt financing, real estate tax rates and other operating expenses, zoning laws and other governmental rules and fiscal policies, energy prices, population trends, risks and operating problems arising out of the presence of certain construction materials, acts of God, uninsurable losses and other factors which are beyond the control of the developer and may make the underlying investments economically unattractive. Development activities also involve the risk that construction may not be completed within budget or on schedule because of cost overruns, work stoppages, shortages of building materials, the inability of contractors to perform their obligations under construction contracts, defects in plans and specifications or various other factors, including natural disasters, which may be exacerbated by climate change. In addition, Braves Holdings has only been managing the mixed use development since 2017 and although real estate developers and other real estate experts have been engaged to assist in its efforts, SplitCo may not be able to fully realize the projected long-term returns and benefits of its real estate development efforts. Any of these risks could result in substantial unanticipated delays or expenses associated with the Mixed-Use Development, which could have an adverse effect on SplitCo’s financial condition and suppress the value of the SplitCo common stock.

Additionally, the Mixed-Use Development requires Braves Holdings to comply with various federal, state and local environmental, health, safety and land use laws and regulations. The properties are subject to such laws and regulations relating to the use, storage, disposal, emission and release of hazardous and non-hazardous substances and employee health and safety as well as zoning restrictions. Additional laws which may be passed in the future, or a finding of a violation of or liability under existing laws, could require SplitCo to make significant expenditures and otherwise limit or restrict some of our operations or developments.

Climate change may also have indirect effects on the Mixed-Use Development by increasing the cost of, or making unavailable, property insurance on terms we find acceptable. To the extent that significant changes in the climate occur where the Mixed-Use Development is located, SplitCo may experience more frequent extreme weather events, which may result in physical damage to its or its lessees’ facilities and may adversely affect SplitCo’s business, results of operations and financial condition.

Failure of lessees of the Mixed-Use Development to renew their leases as they expire and improvement costs associated with new leases may adversely impact SplitCo’s cash flow from operations, which could negatively impact its financial condition.

If Mixed-Use Development lessees do not renew their leases as they expire, SplitCo may not be able to re-lease that space in the Mixed-Use Development. In addition, in connection with securing lease renewals or re-leasing properties, SplitCo may agree to terms that are less economically favorable than expiring lease terms, or may be required to incur significant costs, such as renovations and improvements on behalf of the lessee. Furthermore, a significant portion of the costs of owning property, such as real estate taxes, insurance and maintenance, are not necessarily reduced when circumstances cause a decrease in rental revenue from the properties. Any of these events could adversely affect SplitCo’s cash flow from operations and its ability to service its indebtedness, which could negatively impact its financial condition.

 

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Negative market conditions or adverse events affecting existing or potential lessees of the Mixed-Use Development or the industries in which they operate, could have an adverse impact on SplitCo’s ability to attract new lessees, collect rent or renew leases at the Mixed-Use Development, which could adversely affect SplitCo’s cash flow from operations and inhibit growth.

Cash flow from operations depends in part on SplitCo’s ability to lease space in the Mixed-Use Development on economically favorable terms and to collect rent from lessees on a timely basis. SplitCo could be adversely affected by various facts and events over which it has limited or no control, such as:

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Lack of or loss of demand for the amount of commercial and retail space developed and being developed at The Battery Atlanta;

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Inability to retain existing lessees and attract new lessees;

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Changes in market rental rates;

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Declines in lessees’ creditworthiness and ability to pay rent, which may be affected by their operations, economic downturns and competition within their industries from other operators;

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Defaults by and bankruptcies of lessees, failure of lessees to pay rent on a timely basis, or failure of lessees to comply with their contractual obligations;

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Economic or physical decline of the areas around Truist Park and The Mixed-Use Development; and

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Deterioration of physical condition of properties in the Mixed-Use Development.

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At any time, any Mixed-Use Development lessee may experience a downturn in its business that may weaken its operating results or overall financial condition. As a result, such lessee may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. The bankruptcy or insolvency of a Mixed-Use Development lessee could diminish the revenue SplitCo receives as a result of a lease termination or other concessions, such as reduced rent payable, and SplitCo’s ability to seek payment for unpaid future rent would be substantially limited, if not eliminated. Any lessee bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in material losses to SplitCo and could adversely affect SplitCo’s cash flow from operations and its ability to service its indebtedness.

Braves Holdings has been, and may continue to be, materially impacted by COVID-19 and local, state and federal government actions taken in response, which may have a negative impact on SplitCo’s results of operations and financial condition.

The global spread of COVID-19 prompted most local, state, federal and foreign governmental agencies to impose travel restrictions and local quarantines or stay at home restrictions to contain the spread. As a result, the business operations of Braves Holdings initially were largely, if not completely, suspended at the outset of COVID-19. Prior to late-July 2020, all MLB games were postponed, with a portion of spring training in 2020 for teams also having been cancelled. The Mixed-Use Development was affected due to the impacts of these restrictions on retail as well as restaurants, which had initially been limited to take-out and/or delivery service. However, beginning in July 2020, MLB resumed games, although with no fan attendance.

The Braves’ 2021 regular baseball season was comprised of 161 games, which approximates the number of regular season games held in years prior to the COVID-19 pandemic. Braves Holdings had limitations on the number of fans in attendance at certain games in 2021, thereby reducing revenue associated with fan attendance. It is unclear whether and to what extent future COVID-19 concerns will continue to impact the use of and/or demand for the entertainment and events provided by Braves Holdings and demand for sponsorship and advertising assets. If Braves Holdings continues to face cancelled events and reduced attendance, the impact may substantially decrease SplitCo’s revenue. Due to the revenue reductions caused by COVID-19 to date, Braves Holdings has looked to reduce expenses, but should such impacts resume, Braves Holdings may not be able to reduce expenses to the same degree as any decline in revenue, which may adversely affect SplitCo’s results of operations and cash flow.

 

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In addition, Braves Holdings is particularly sensitive to reductions in discretionary consumer spending. SplitCo cannot predict the time period over which its businesses will be impacted by COVID-19. Over the long-term, COVID-19 could impede economic activity in impacted regions or globally, causing a global recession, leading to a further decline in discretionary spending on sports and entertainment events and other leisure activities, which could result in long-term effects on SplitCo’s businesses.

Even as SplitCo’s businesses have resumed more normal operations, there can be no assurances that fans attending events or vendors and employees working at Braves events will not contract COVID-19 in the course of attending or providing services. Any such occurrence could result in litigation, legal and other costs, insufficient staff or supply to provide services and reputational risk that could materially and adversely impact SplitCo’s businesses and results of operations. Even after the COVID-19 pandemic subsides, the U.S. economy may experience a recession, and SplitCo anticipates its businesses and operations could be materially adversely affected.

Weak economic conditions may reduce consumer demand for products, services and events offered by SplitCo.

A weak economy as a result of inflation and any recession, could adversely affect demand for SplitCo’s products, services and events. A substantial portion of SplitCo’s revenue is derived from discretionary spending by individuals on tickets, including postseason games, concessions, merchandise, suites and premium seat fees, which typically falls during times of economic instability. In addition, weak economic conditions and reductions in discretionary spending may adversely impact the demand for products and services of SplitCo’s Mixed-Use Development lessees which may weaken the financial condition of such lessees. As a result, such lessees may delay lease commencement, fail to make rental payments or become insolvent. See “—​Negative market conditions or adverse events affecting existing or potential lessees of the Mixed-Use Development or the industries in which they operate, could have an adverse impact on SplitCo’s ability to attract new lessees, re-lease space, collect rent or renew leases at the Mixed-Use Development, which could adversely affect SplitCo’s cash flow from operations and inhibit growth” above. Accordingly, the ability of SplitCo to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments decline. While SplitCo is currently unable to predict the extent of any of these potential adverse effects in the future, as of December 31, 2022, SplitCo does not believe that its operations have been materially impacted by recent inflationary pressures.

Fans attending professional baseball games risk personal injury or accident, which could subject SplitCo to personal injury or other claims and could increase SplitCo’s expenses.

Personal injuries and accidents involving fans attending professional baseball games have occurred, and may in the future occur, which could subject SplitCo to claims and liabilities for personal injuries which could increase expenses. While SplitCo maintains insurance policies that provide coverage within limits that are sufficient, in management’s judgment, to protect SplitCo from material financial loss for personal injuries sustained by persons at its venues, there can be no assurance that such insurance will be adequate at all times and in all circumstances.

SplitCo may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks.

The occurrence and threat of extraordinary events, such as terrorist attacks, intentional or unintentional mass-casualty incidents, natural disasters or similar events, may substantially decrease the attendance at professional baseball games, which may decrease SplitCo’s revenue or expose it to substantial liability.

While SplitCo constantly evaluates the security precautions for its events, no security measures can guarantee safety. Despite SplitCo’s best efforts, some occurrences or actions are difficult to foresee and adequately plan for, which could lead to fan, vendor and/or employee harm resulting in fines, penalties, legal costs and reputational risk that could materially and adversely impact SplitCo’s business and results of operations.

Poor weather may adversely affect attendance at professional baseball games.

Due to weather conditions, SplitCo may be required to cancel or reschedule one or more baseball games to another available day, which could increase its costs and could negatively impact attendance, as well as concession and merchandise sales, which could negatively impact SplitCo’s financial performance.

 

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Data loss or other breaches of SplitCo’s network security could materially harm its business and results of operations.

Penetration of SplitCo’s network or other misappropriation or misuse of personal or sensitive information and data, including credit card information and other personally identifiable information, could subject it to increased costs, litigation, actions from governmental authorities, and financial or other liabilities. In addition, security breaches, incidents or the inability to protect information could lead to ticketing fraud and counterfeit tickets. Security breaches and incidents could also result in significant costs related to remediation efforts. Any of the foregoing could adversely affect SplitCo’s business, financial condition and results of operations.

The chapter 11 bankruptcy filing by Diamond Sports Group may interrupt the regional broadcasting of Braves games, which may adversely impact the Braves’ fan base and results of operations.

Diamond Sports Group, a subsidiary of Sinclair Broadcasting Group which licenses and distributes sports content in various regional markets, including the Braves games (other than nationally televised games) in the Braves home television territory, filed for chapter 11 protection in March 2023. As a result of the chapter 11 proceeding, SplitCo may be required to repay up to $34.2 million, the amount remitted to SplitCo and its subsidiaries during the 90-day preference period preceding the filing. In addition, if the Sportsouth Network II, LLC, a subsidiary of Diamond Sports Group, elects to reject the regional sports broadcasting license in the bankruptcy proceeding, regional broadcast rights will revert to SplitCo, and SplitCo will attempt to find a replacement broadcaster to produce and distribute their games but there is no assurance they will be successful, and SplitCo and its subsidiaries may not receive any revenue from Sportsouth Network II during the remaining contract term and would be required to write down contract asset amounts of $45.7 million recorded on SplitCo’s balance sheet as of December 31, 2022. Any interruption of the regional broadcasting of Braves games due to the chapter 11 bankruptcy may adversely impact the Braves’ fan base and SplitCo’s results of operations. In addition to any lost broadcast revenue or incurred credit losses, SplitCo may also incur additional expenses in negotiating a replacement regional broadcast license or an alternative arrangement. SplitCo cannot predict the outcome of any bankruptcy proceeding or its full impact on SplitCo’s business and results of operations.

SplitCo and its subsidiaries have operations outside of the United States that are subject to numerous operational risks.

SplitCo and its subsidiaries operate in countries other than the United States, including the Dominican Republic. In many foreign countries, particularly in certain developing economies, it is not uncommon to encounter business practices that are prohibited by certain regulations, such as the Foreign Corrupt Practices Act and similar laws. Although SplitCo and its subsidiaries have undertaken compliance efforts with respect to these laws, their respective employees, contractors and agents, as well as those companies to which they outsource certain of their business operations, may take actions in violation of their policies and procedures. Any such violation, even if prohibited by the policies and procedures of these subsidiaries and business affiliates or the law, could have certain adverse effects on the financial condition of SplitCo, its subsidiaries and business affiliates. Any failure by SplitCo, its subsidiaries and business affiliates to effectively manage the challenges associated with the international operation of its and/or their businesses could materially adversely affect SplitCo’s and its subsidiaries’ financial condition.

Factors Relating to Ownership of SplitCo’s Common Stock and the Securities Market

It is not certain that an active trading market will develop or be sustained after the Split-Off, and following the Split-Off, SplitCo’s stock price may fluctuate significantly.

Although the Braves Group is currently a tracking stock of Liberty Media, there is currently no public market for the New BATRA, New BATRB and New BATRK as common stock of SplitCo which will be received in the Split-Off. Liberty Media cannot predict the prices at which New BATRA, New BATRB or New BATRK may trade after the Split-Off, the effect of the Split-Off on the trading prices of the Liberty Media common stock or whether the market value of the shares of SplitCo common stock after the Split-Off will be less than, equal to or greater than the market value of a share of the corresponding series of Liberty Media’s Liberty Braves common stock prior to the Split-Off.

The market price of SplitCo common stock may fluctuate significantly due to a number of factors (none of which can be guaranteed to occur), some of which may be beyond SplitCo’s control, including:

 

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actual or anticipated fluctuations in SplitCo’s operating results;

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changes in earnings estimated by securities analysts or SplitCo’s ability to meet those estimates;

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the operating and stock price performance of comparable companies; and

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domestic and foreign economic conditions.

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SplitCo’s multi-series structure may depress the trading price of the shares of SplitCo common stock.

SplitCo’s multi-series structure may result in a lower or more volatile market price of the shares of SplitCo common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multi-series share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares of common stock from being added to these indices. Any such exclusion from indices could result in a less active trading market for, and adversely affect the value of, the shares of SplitCo common stock, in part because mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not be investing in the shares of SplitCo common stock. In addition, several stockholder advisory firms have announced their opposition to the use of multiple-class structures. As a result, the multi-series structure of SplitCo’s common stock may cause stockholder advisory firms to publish negative commentary about SplitCo’s corporate governance practices or otherwise seek to cause SplitCo to change its capital structure. Any actions or publications by stockholder advisory firms critical of SplitCo’s corporate governance practices or capital structure could also adversely affect the value of the shares of SplitCo common stock.

For as long as SplitCo is an emerging growth company, it will not be required to comply with certain reporting requirements, including disclosure about its executive compensation, that apply to other public companies.

SplitCo is classified as an “emerging growth company” under the JOBS Act. As a result, it has reduced Sarbanes-Oxley Act compliance requirements, as discussed elsewhere, for as long as it is an emerging growth company, which may be up to five full fiscal years. Unlike other public companies, SplitCo will not be required to, among other things, (i) comply with certain audit-related requirements that SplitCo would otherwise be subject to but for its status as an emerging growth company, (ii) provide certain disclosure regarding executive compensation required of larger public companies or (iii) hold nonbinding advisory votes on executive compensation.

To the extent that SplitCo relies on any of the exemptions available to emerging growth companies, you will receive less information about its executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find SplitCo’s common stock to be less attractive as a result, there may be a less active trading market for SplitCo’s common stock and its stock price may be more volatile.

If, following the Split-Off, SplitCo is unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or SplitCo’s internal control over financial reporting is not effective, the reliability of SplitCo’s financial statements may be questioned and SplitCo’s stock price may suffer.

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to complete a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, SplitCo will be required to document and test its internal control procedures, SplitCo’s management will be required to assess and issue a report concerning SplitCo’s internal control over financial reporting, and SplitCo’s independent auditors will be required to issue an attestation regarding its internal control over financial reporting. However, as an emerging growth company, SplitCo will not be required to have its independent auditors attest to the effectiveness of its internal control over financial reporting until SplitCo’s first annual report subsequent to ceasing to be an emerging growth company. As a result, SplitCo may not be required to have its independent auditors attest to the effectiveness of its internal control over financial reporting until as late as the annual report for

 

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the year ending [    ]. Although Liberty Media does not expect the annual costs to comply with Section 404 to be significant (based on Liberty Media’s preliminary assessments), the rules governing the standards that must be met for SplitCo’s management to assess its internal control over financial reporting are complex, subject to change, and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, SplitCo’s management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If SplitCo’s management cannot favorably assess the effectiveness of its internal control over financial reporting when it’s required to do so or SplitCo’s auditors identify material weaknesses in its internal control, investor confidence in SplitCo’s financial results may weaken, and SplitCo’s stock price may suffer.

It may be difficult for a third party to acquire SplitCo, even if doing so may be beneficial to SplitCo stockholders.

Certain provisions of SplitCo’s restated charter and by-laws may discourage, delay or prevent a change in control of SplitCo that a stockholder may consider favorable. These provisions include the following:

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no person may own 10% or more of the number of outstanding shares of SplitCo common stock unless such person is expressly approved by MLB (which includes Liberty Media) or qualifies as an exempt person (which is generally defined to include [           ]);

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authorizing a capital structure with multiple series of common stock: a Series B that entitles the holders to ten votes per share, a Series A that entitles the holders to one vote per share, and a Series C that, except as otherwise required by applicable law, entitles the holders to no voting rights;

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classifying SplitCo’s board of directors with staggered three-year terms, which may lengthen the time required to gain control of SplitCo’s board of directors;

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limiting who may call special meetings of stockholders;

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prohibiting stockholder action by written consent (subject to certain exceptions), thereby requiring stockholder action to be taken at a meeting of the stockholders;

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requiring stockholder approval by holders of at least 662∕3% of SplitCo’s voting power with respect to certain extraordinary matters, such as a merger or consolidation of SplitCo, a sale of all or substantially all of SplitCo’s assets or an amendment to SplitCo’s restated charter (except in the event approved by at least 75% of SplitCo’s board of directors);

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establishing advance notice requirements for nominations of candidates for election to SplitCo’s board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and

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the existence of authorized and unissued stock, including “blank check” preferred stock, which could be issued by SplitCo’s board of directors to persons friendly to its then current management, thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control of SplitCo.

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SplitCo’s stockholders will have different rights and privileges under Nevada law than under Delaware law and case law in Nevada may be less predictable than in Delaware.

SplitCo is a Nevada corporation and the application of Nevada law to holders of SplitCo common stock will differ in certain material respects from the application of Delaware law to holders of Liberty Braves common stock. Therefore, following the Split-Off, SplitCo stockholders will have different rights and privileges under Nevada law than holders of Liberty Braves common stock under Delaware law. See “— Directors and officers of SplitCo are protected from liability for a broad range of actions” and “— The holders of any series of SplitCo common stock, or the holders of SplitCo common stock as a whole, may not have any remedies if an action by its directors or officers prioritizes other interests or has a disparate effect on SplitCo common stock or any series thereof” below as well as “Description of SplitCo Capital Stock and Comparison of Stockholder Rights” below.

 

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Because of Delaware’s prominence as a state of incorporation for many large corporations, the Delaware courts have developed considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing Delaware law. While Nevada also has adopted comprehensive, modern and flexible corporate law statutes, because Nevada case law concerning the effects of its statutes and regulations is more limited, SplitCo and its stockholders may experience less predictability with respect to legality of corporate affairs and transactions and stockholders’ rights to challenge them in situations where the application of the statute may be unclear.

Directors and officers of SplitCo are protected from liability for a broad range of actions.

Delaware law permits limiting or eliminating the monetary liability of a director and, subject to certain limitations set forth in the DGCL, certain officers, to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, in the case of directors, unlawful payment of dividends or unlawful stock purchase or redemption, any transaction from which a director or officer derived an improper personal benefit, or, in the case of officers, any action by or in the right of the corporation. Nevada law has a similar, but somewhat broader provision limiting or eliminating the individual liability of both directors and officers unless the articles of incorporation provide for greater liability. A director or officer of a Nevada corporation is not liable unless the presumption that such person acted in good faith, on an informed basis and with a view to the interests of the corporation has been rebutted. In addition, there must be proof both that the act or failure to act constituted a breach of a fiduciary duty as a director or officer and that such breach involved intentional misconduct, fraud or a knowing violation of law, a more stringent burden than a breach of the duty of loyalty or deriving an improper personal benefit under the Delaware statute. In addition, the Nevada provision permitting limitation of liability applies to both directors and officers and expressly applies to liabilities owed to creditors of the corporation. The SplitCo restated charter includes restrictions on the share ownership of SplitCo common stock by certain persons, which if triggered would result in an immediate transfer of the applicable number of shares to a trust for the benefit of the holder.

To comply with the MLB Rules and Regulations, the SplitCo restated charter will provide that (i) employees of MLB and related entities may not own SplitCo common stock, (ii) persons who are employed by or otherwise associated with an MLB Club other than the Braves may not own 5% or more of the number of outstanding shares of SplitCo common stock, and (iii) no person may own 10% or more of the number of outstanding shares of SplitCo common stock unless, in the case of this clause (iii), such person is expressly approved by MLB (which includes Liberty Media) or qualifies as an exempt person (which is generally defined to include [           ]). In the event that a holder attempts to acquire shares of SplitCo common stock in violation of this charter provision, the applicable shares will automatically be transferred to a trust which will sell the shares for the benefit of the holder (subject to certain exceptions, such as in the event of an inadvertent violation of the restrictions described in clause (ii) or (iii) above which is cured within the applicable time frame). No assurance can be given that the trust will be able to sell the shares at a price that is equal to or greater than the price paid by the holder. In addition, the holder’s right to receive the net proceeds of the sale, as well as any dividends or other distributions to which the holder would otherwise be entitled, will be subject to the holder’s compliance with the applicable mechanics included in the SplitCo restated charter.

SplitCo’s restated charter will provide that the Eighth Judicial District Court of the State of Nevada shall be the exclusive forum for certain litigation that may be initiated by SplitCo stockholders, and that the federal courts shall be the exclusive forum for claims under the Securities Act; these provisions could limit SplitCo stockholders’ ability to obtain a favorable judicial forum for disputes with SplitCo or its directors, officers or employees.

SplitCo’s restated charter will provide that, subject to limited exceptions, the Eighth Judicial District Court of the State of Nevada in Clark County, Nevada (the Nevada Eighth Judicial District Court) (or if the Nevada Eighth Judicial District Court does not have jurisdiction, any other state district court located in the State of Nevada, and if no state district court in the State of Nevada has jurisdiction, any federal court located in the State of Nevada) shall, to the fullest extent permitted by law, be the exclusive forum for certain specified types of “internal actions” as defined under Nevada law, including (a) those brought in the name or right of SplitCo or on its behalf; (b) those for or based upon a breach of fiduciary duty against

 

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any director, officer, employee or agent of SplitCo in such capacity; (c) those arising pursuant to, or to interpret, apply, enforce or determine the validity of, any provision of the Nevada corporation laws, the articles of incorporation, the bylaws or certain voting agreements or trusts.

In addition, SplitCo’s restated charter will provide that the federal district courts of the United States shall be, to the fullest extent provided by law, the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act. In addition, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

These choice of forum provisions may otherwise limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with SplitCo or its directors, officers, employees or agents, which may discourage such lawsuits against SplitCo and its directors, officers, employees and agents. Stockholders who do bring a claim in the Nevada Eighth Judicial District Court could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State of Nevada. The Nevada Eighth Judicial District Court may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to SplitCo than to its stockholders. Similarly, the federal district courts may also reach different judgments in Securities Act cases than state courts. Alternatively, if a court were to find the choice of forum provision contained in SplitCo’s restated charter to be inapplicable or unenforceable in an action, SplitCo may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect SplitCo’s business and financial condition.

The holders of any series of SplitCo common stock, or the holders of SplitCo common stock as a whole, may not have any remedies if an action by its directors or officers prioritizes other interests or has a disparate effect on SplitCo common stock or any series thereof.

Principles of Nevada law and the provisions of SplitCo’s restated charter may protect decisions of its board of directors that weigh interests different from those of the holders of SplitCo’s common stock, or any series thereof, or that have a disparate impact upon holders of any series of SplitCo common stock. Under Nevada law, the board of directors has the duty to exercise its powers in good faith and with a view to the interests of the corporation. In doing so, the board of directors may consider all relevant facts, circumstances, contingencies or constituencies, including, without limitation, the interests of the corporation’s employees, suppliers, creditors or customers; the economy of the state or the nation; the interests of the community or of society; the long-term or short-term interests of the corporation, including the possibility that these interests may be best served by the continued independence of the corporation; or the long-term or short-term interests of the corporation’s stockholders, including the possibility that these interests may be best served by the continued independence of the corporation. Directors may consider or assign weight to the interests of any particular person or group, or to any other relevant facts, circumstances, contingencies or constituencies and are not required to consider, as a dominant factor, the effect of a proposed corporate action upon any particular group or constituency having an interest in the corporation. Under the principles of Nevada law referred to above and the business judgment rule, you may not be successful in challenging these decisions if a majority of SplitCo’s board of directors is disinterested, independent and adequately informed with respect to decisions of the board and acts in good faith and in the honest belief that the board is acting in the best interests of all of SplitCo’s stockholders.

Although New BATRB is expected to be quoted on the OTC Markets, there is no meaningful trading market expected for the stock.

The shares of New BATRB are not widely held, with approximately [    ]% of the outstanding shares of New BATRB immediately following the Split-Off expected to be beneficially owned by Mr. Malone (based on the exchange of [     ] shares of BATRB outstanding as of [    ]). Although New BATRB is expected to be quoted on the OTC Markets, it is expected to be sparsely traded and will not have an active trading market. The OTC Markets tend to be highly illiquid, in part, because there is no national quotation system by which potential investors can track the market price of shares except through information received or generated by a limited number of broker-dealers that make markets in particular stocks. There is also a

 

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greater chance of market volatility for securities that trade on the OTC Markets as opposed to a national exchange or quotation system. This volatility is due to a variety of factors, including a lack of readily available price quotations, lower trading volume, absence of consistent administrative supervision of “bid” and “ask” quotations, and market conditions. Each share of New BATRB is convertible, at any time at the option of the holder, into one share of New BATRA, which is expected to be listed and traded on the Nasdaq Global Select Market under the symbol “BATRA.”

SplitCo’s multi-series voting structure may limit your ability to influence corporate matters and future issuances of New BATRB may further dilute voting power of shares of New BATRA.

SplitCo’s common stock will be divided into three series of common stock: New BATRA, New BATRB and New BATRK. Holders of record of New BATRA are entitled to one vote for each share of such stock and holders of record of New BATRB are entitled to ten votes for each share of such stock on all matters submitted to a vote of stockholders. Holders of record of New BATRK will not be entitled to any voting rights, except as otherwise required by Nevada law, in which case, each such holder of record of New BATRK will be entitled to 1/100 of a vote per share. When so required, holders of record of New BATRK will be entitled to 1/100th of a vote for each share of such stock. The SplitCo restated charter will not provide for cumulative voting in the election of directors and will permit future issuances of New BATRA, New BATRB and New BATRK following consummation of the Split-Off. Any future issuances of New BATRA, New BATRB or New BATRK may dilute your interest in SplitCo.

Each share of New BATRB will be convertible, solely at the option of the holder, into one share of New BATRA, but will not be convertible under any other circumstance. Shares of New BATRA and New BATRK are not convertible under any circumstance.

Although New BATRB is expected to be quoted on the OTC Markets, it is expected to be sparsely traded and will not have an active trading market. Only New BATRA shares and New BATRK shares are expected to be listed and traded on Nasdaq. As a result, your ability to purchase New BATRB shares will be limited. Future issuances of New BATRB will dilute the aggregate voting power of the issued and outstanding shares of New BATRA and may further concentrate the aggregate voting power of SplitCo’s issued and outstanding shares of common stock among the holders of New BATRB. The voting and conversion rights of the New BATRB shares, SplitCo’s ability to issue additional New BATRB shares and your limited ability to purchase New BATRB shares may limit your ability to influence corporate matters and adversely affect the value of New BATRA shares and New BATRK shares.

Factors Relating to the Reclassification

Risks Related to the Reclassification and to Liberty Media’s Tracking Stock Capitalization

Liberty Media may not realize the potential benefits from the Reclassification in the near term or at all.

Liberty Media anticipates the realization of strategic and financial benefits as a result of the Reclassification. See “The Proposed Transactions — Reasons for the Split-Off and the Reclassification.” In particular, Liberty Media’s board of directors believes that the Reclassification will provide greater operational and financial flexibility in executing its business strategies by permitting Liberty Media to bring greater clarity to the businesses and assets currently attributed to the Liberty SiriusXM Group and the Formula One Group thereby allowing the New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock to move more in line with the fundamentals of the more focused businesses and assets attributed to the New Liberty SiriusXM Group, New Formula One Group and Liberty Live Group, respectively. Liberty Media expects the Reclassification to lead to greater market recognition and more accurate valuation and to facilitate strategic acquisitions by Liberty Media. The Reclassification will also offer greater choice by investors while maintaining the advantages of doing business under common ownership. In addition, the refinement of Liberty Media’s businesses, assets and liabilities into the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group will enable Liberty Media to more effectively tailor management and employee incentives. The terms of the Liberty Media restated charter will preserve the ability of its board of directors to unwind the tracking stock

 

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capitalization while retaining future restructuring flexibility by preserving its ability to undertake future asset segmentation and capital restructurings.

The illustrative historical attributed financial information of the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group included in this joint proxy statement/prospectus may not necessarily reflect their results had the Reclassification occurred on the assumed dates or had they been separate companies.

One of the reasons for the creation of a tracking stock is to permit equity investors to apply more specific criteria in valuing the shares of a particular group, such as comparisons of earnings multiples with those of other companies in the same business sector. In valuing shares of the New Liberty SiriusXM common stock, New Liberty Formula One common stock and the Liberty Live common stock, investors should recognize that the illustrative historical attributed financial information of the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group has been extracted from Liberty Media’s consolidated financial statements and assumes that the Split-Off and Reclassification occurred as of the beginning of the earliest period presented, but may not necessarily reflect what the New Liberty SiriusXM Group’s, the New Formula One Group’s and the Liberty Live Group’s results of operations, financial condition and cash flows would have been had the Split-Off and Reclassification occurred on such earlier dates or had each of these groups been separate, stand-alone entities pursuing independent strategies during the periods presented.

Following the Reclassification, holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will be common stockholders of Liberty Media and, therefore, are subject to risks associated with an investment in Liberty Media as a whole, even if a holder does not own shares of common stock of all of Liberty Media’s groups.

Even though Liberty Media has attributed, for financial reporting purposes, all of Liberty Media’s consolidated assets, liabilities, revenue, expenses and cash flows among the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group in order to prepare the separate financial statement schedules included in this joint proxy statement/prospectus for each of those groups, Liberty Media will retain legal title to all of Liberty Media’s assets and Liberty Media’s tracking stock capitalization will not limit Liberty Media’s legal responsibility, or that of Liberty Media’s subsidiaries, for the liabilities included in any set of financial statement schedules. Holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will not have any legal rights related to specific assets attributed to their associated group and, in any liquidation, holders of New Liberty SiriusXM common stock, holders of New Liberty Formula One common stock and holders of Liberty Live common stock will be entitled to receive a proportionate share of Liberty Media’s available net assets based on their respective number of liquidation units. See “Description of Liberty Media Capital Stock and Comparison of Stockholder Rights.”

Possible market confusion may result from holders of Liberty Media’s tracking stocks mistakenly believing that (i) they directly own stock of a company that is attributed to one of Liberty Media’s tracking stocks, and (ii) they have any equity or voting interests with respect to companies attributed to one of Liberty Media’s tracking stocks.

Liberty Media holds interests in various companies, including public companies, and these interests are attributed to its tracking stock groups. In particular, after the Reclassification, the assets of the New Liberty SiriusXM Group will include Liberty Media’s ownership interest in Sirius XM Holdings and the assets of the Liberty Live Group will include Liberty Media’s ownership interest in Live Nation. Similarly, the New Formula One Group will include Liberty Media’s subsidiary that owns the Formula 1 business. Depending on the composition of the assets underlying Liberty Media’s tracking stock groups from time to time, confusion in the marketplace may occur if holders of Liberty Media’s tracking stock mistakenly believe they own stock of a company attributed to the applicable tracking stock group. This may especially be true in cases where a tracking stock group has a name that is similar to the publicly traded company attributed to the applicable tracking stock group, as is the case of (i) the New Liberty SiriusXM Group and Sirius XM Holdings and (ii) the Liberty Live Group and Live Nation. As described above, holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock do not have any

 

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legal rights related to specific assets attributed to their associated tracking stock group. Similarly, holders of these tracking stocks do not, by virtue of their ownership of Liberty Media tracking stock, own any equity or voting interest in any company attributed to one of Liberty Media’s tracking stock groups, including any public companies.

Liberty Media may split off, spin off or reattribute assets, liabilities and businesses attributed to its tracking stock groups in a manner that may disparately impact some of Liberty Media’s stockholders if its board of directors determines such transaction to be in the best interest of all of Liberty Media’s stockholders, and in some cases, not all of Liberty Media’s stockholders would be entitled to vote on such a transaction.

Pursuant to the terms of the Liberty Media restated charter, Liberty Media’s board of directors may determine that it is in the best interest of all of Liberty Media’s stockholders to effect a redemptive split-off whereby all or a portion of the outstanding shares of a particular tracking stock would be redeemed for shares of common stock of a subsidiary (the Split-Off Subsidiary) that holds all or a portion of the assets and liabilities attributed to such tracking stock group subject to the approval of only the holders of the tracking stock to be redeemed. However, the vote of holders of Liberty Media’s other tracking stocks would not be required, unless the Split-Off Subsidiary also held assets and liabilities of such other tracking stock group(s). If Liberty Media were to effect a redemptive split-off, then, pursuant to the terms of the Liberty Media restated charter, Liberty Media would be required to redeem the outstanding shares of the affected tracking stock from its holders on an equal per share basis (i.e., it could not redeem shares from holders of only certain series of the affected tracking stock or redeem from all holders of the affected tracking stock on a non-pro rata basis). Following a redemptive split-off, holders of the other tracking stock(s) would continue to hold stock tracking the performance of Liberty Media’s remaining assets and liabilities which would not have changed after the redemptive split-off, unless a reattribution among the tracking stocks occurred in connection with the redemptive split-off (as discussed below). In addition, in the case of a partial redemptive split-off, holders of the affected tracking stock would hold shares of the Split-Off Subsidiary and continue to hold a reduced number of shares of the affected tracking stock which would track the remaining assets and liabilities retained by Liberty Media and attributed to such tracking stock after the Split-Off.

Liberty Media is also permitted, pursuant to the terms of the Liberty Media restated charter, to effect a spin-off of certain of its assets and liabilities through the dividend of shares of a subsidiary holding such assets and liabilities, and the spin-off would not be subject to prior stockholder approval. In this situation, a tracking stockholder would retain their tracking stock shares and receive shares of the spun-off entity.

Furthermore, in structuring these transactions, Liberty Media’s board of directors may determine to alter the composition of the assets and liabilities underlying its tracking stock groups through a reattribution. As contemplated by both the Liberty Media restated charter and Liberty Media’s management and allocation policies designed to assist it in managing and separately presenting the businesses and operations attributed to its tracking stock groups, Liberty Media’s board of directors is vested with the discretion to reattribute assets and liabilities from one tracking stock group to another tracking stock group without the approval of any of its stockholders, and the only limitations on its exercise of such discretion are that the reattribution be in the best interest of all of Liberty Media’s stockholders and that the reattribution be done on a fair value basis. Holders of the affected tracking stock groups will not be entitled to a separate vote to approve a reattribution, even if such reattribution is occurring in connection with a redemptive Split-Off and such stockholders would otherwise be entitled to vote on the redemptive split-off itself.

The Liberty Media board of directors’ ability to reattribute businesses, assets and expenses between and among tracking stock groups may make it difficult to assess the future prospects of Liberty Media’s tracking stock groups based on past performance.

The Liberty Media board of directors is vested with discretion to reattribute businesses, assets and liabilities that are attributed to one tracking stock group to another tracking stock group, without the approval of any of Liberty Media’s stockholders. See “The Reclassification Proposals — Management and Allocation Policies.” Any such reattribution made by Liberty Media’s board, as well as the existence, in and of itself, of the right to effect a reattribution may impact the ability of investors to assess the future prospects of the businesses and assets attributed to a tracking stock group, including liquidity and capital resource

 

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needs, based on past performance. Stockholders may also have difficulty evaluating the liquidity and capital resources of the businesses and assets attributed to each group based on past performance, as Liberty Media’s board of directors may use one group’s liquidity to fund another group’s liquidity and capital expenditure requirements through the use of intergroup loans and intergroup interests.

Liberty Media could be required to use assets attributed to one group to pay liabilities attributed to another group.

The assets attributed to one group are potentially subject to the liabilities attributed to another group, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other group. While Liberty Media’s current management and allocation policies provide that reattributions of assets between groups will result in the creation of an intergroup loan or an intergroup interest or an offsetting reattribution of cash or other assets, no provision of the Liberty Media restated charter prevents Liberty Media from satisfying liabilities of one group with assets of another group, and Liberty Media’s creditors will not in any way be limited by Liberty Media’s tracking stock capitalization from proceeding against any assets they could have proceeded against if Liberty Media did not have a tracking stock capitalization.

The market price of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock may not reflect the performance of the businesses and assets attributed to the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group, respectively, as Liberty Media intends.

Liberty Media cannot assure you that the market price of the common stock related to a group will, in fact, reflect the performance of the group of businesses, assets and liabilities attributed to that group. Holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will be common stockholders of Liberty Media as a whole and, as such, will be subject to all risks associated with an investment in Liberty Media and all of Liberty Media’s businesses, assets and liabilities. As a result, the market price of each tracking stock may, in part, reflect events that are intended to be reflected or tracked by a different tracking stock of Liberty Media. In addition, investors may discount the value of the stock related to a group because it is part of a common enterprise rather than a stand-alone entity.

The market price of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock may be volatile, could fluctuate substantially and could be affected by factors that do not affect traditional common stock.

Liberty Media does not know how the market will react to the Reclassification. In addition, to the extent the market prices of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock track the performance of more focused groups of businesses, assets and liabilities than Liberty Media’s existing common stock does, the market prices of these updated tracking stocks may be more volatile than the market prices of Liberty Media’s existing tracking stock groups have been historically. The market prices of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock may be materially affected by, among other things:

•

actual or anticipated fluctuations in a group’s operating results or in the operating results of particular companies attributable to such group;

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•

potential acquisition activity by Liberty Media (regardless of the group to which it is attributed) or the companies in which Liberty Media invests;

​

•

issuances of debt or equity securities to raise capital by Liberty Media or the companies in which Liberty Media invests and the manner in which that debt or the proceeds of an equity issuance are attributed to each of the groups;

​

•

changes in financial estimates by securities analysts regarding New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock or the companies attributable to Liberty Media’s tracking stock groups;

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•

the complex nature and the potential difficulties investors may have in understanding the terms of Liberty Media’s three updated tracking stocks, as well as concerns regarding the possible effect of certain of those terms on an investment in Liberty Media’s common stock; and

​

•

general market conditions.

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Liberty Media cannot assure you that the combined market value of the shares of New Liberty SiriusXM common stock and Liberty Live common stock that you receive in the Reclassification for one share of Liberty SiriusXM common stock, or the shares of New Liberty Formula One common stock and Liberty Live common stock that you receive in the Reclassification for one share of Liberty Formula One common stock, will equal or exceed the current market value of a share of Liberty SiriusXM common stock or Liberty Formula One common stock, respectively. In addition, until an orderly trading market develops for the New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock following the Reclassification, the trading prices of those stocks may fluctuate significantly.

The market value of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock could be adversely affected by events involving the assets and businesses attributed to one or more of the other groups.

Because Liberty Media will be the issuer of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock, an adverse market reaction to events relating to the assets and businesses attributed to one of Liberty Media’s groups, such as earnings announcements or announcements of new products or services or acquisitions or dispositions that the market does not view favorably, may cause an adverse market reaction in the common stock of the other groups. This could occur even if the triggering event is not material to Liberty Media as a whole. Certain events may also have a greater impact on one group than the same triggering event would have on another group due to the asset composition of the affected group. In addition, the incurrence of significant indebtedness by Liberty Media or any of Liberty Media’s subsidiaries on behalf of one group, including indebtedness incurred or assumed in connection with acquisitions of or investments in businesses, could affect Liberty Media’s subsidiaries’ credit ratings and, therefore, could increase the borrowing costs of businesses attributable to Liberty Media’s other groups or the borrowing costs of Liberty Media as a whole.

Liberty Media may not pay dividends equally or at all on New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock.

Liberty Media does not presently intend to pay cash dividends on New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock for the foreseeable future. However, Liberty Media will have the right to pay dividends on the shares of common stock related to each group in equal or unequal amounts, and Liberty Media may pay dividends on the shares of common stock related to one group and not pay dividends on shares of common stock related to another group. In addition, any dividends or distributions on, or repurchases of, shares relating to a group will reduce Liberty Media’s assets legally available to be paid as dividends on the shares relating to another group.

Liberty Media’s tracking stock capital structure could create conflicts of interest, and Liberty Media’s board of directors may make decisions that could adversely affect only some holders of Liberty Media’s common stock.

Liberty Media’s tracking stock capital structure could give rise to occasions when the interests of holders of stock related to one group might diverge or appear to diverge from the interests of holders of stock related to one or both of the other groups. In addition, given the nature of their businesses, there may be inherent conflicts of interests between the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group. Liberty Media’s tracking stock groups are not separate entities and thus holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will not have the right to elect separate boards of directors. As a result, Liberty Media’s officers and directors owe fiduciary duties to Liberty Media as a whole and all of Liberty Media’s stockholders as opposed to only holders of a particular group. Decisions deemed to be in the best interest of

 

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Liberty Media and all of Liberty Media’s stockholders may not be in the best interest of a particular group or groups when considered independently. Examples include:

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decisions as to the terms of any business relationships that may be created between groups, such as between the New Liberty SiriusXM Group and the New Formula One Group or between the New Liberty SiriusXM Group and the Liberty Live Group;

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•

the terms of any reattributions of assets between one or more groups;

​

•

decisions as to the allocation of consideration among the holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock, or among the series of stocks relating to Liberty Media’s groups, to be received in connection with a merger involving Liberty Media;

​

•

decisions as to the allocation of corporate opportunities between the groups, especially where the opportunities might meet the strategic business objectives of more than one group;

​

•

decisions as to operational and financial matters that could be considered detrimental to one or more groups but beneficial to another;

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•

decisions as to the conversion of shares of common stock of one group into shares of common stock of another;

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•

decisions regarding the creation of, and, if created, the subsequent increase or decrease of any intergroup interest that one group may own in another group;

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•

decisions as to the internal or external financing attributable to businesses or assets attributed to any of Liberty Media’s groups;

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•

decisions as to the dispositions of assets of any of Liberty Media’s groups; and

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decisions as to the payment of dividends on the stock relating to any of Liberty Media’s groups.

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Liberty Media’s directors’ or officers’ equity ownership may create or appear to create conflicts of interest.

If directors or officers own disproportionate interests (in percentage or value terms) in New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock, that disparity could create or appear to create conflicts of interest when they are faced with decisions that could have different implications for the holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock.

Other than pursuant to the management and allocation policies described in this joint proxy statement/​prospectus, Liberty Media has not adopted any specific procedures for consideration of matters involving a divergence of interests among holders of shares of stock relating to Liberty Media’s three groups, or among holders of different series of stock relating to a specific group.

Rather than develop additional specific procedures in advance, Liberty Media’s board of directors intends to exercise its judgment from time to time, depending on the circumstances, as to how best to:

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obtain information regarding the divergence (or potential divergence) of interests;

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•

determine under what circumstances to seek the assistance of outside advisers;

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•

determine whether a committee of Liberty Media’s board of directors should be appointed to address a specific matter and the appropriate members of that committee; and

​

•

assess what is in Liberty Media’s best interests and the best interests of all of Liberty Media’s stockholders.

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Liberty Media’s board of directors believes the advantage of retaining flexibility in determining how to fulfill its responsibilities in any such circumstances as they may arise outweighs any perceived advantages of adopting additional specific procedures in advance. See “The Reclassification Proposals — Management and Allocation Policies.”

 

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Liberty Media’s board of directors may change the management and allocation policies to the detriment of one or more groups without stockholder approval.

Following the Reclassification, Liberty Media will implement the management and allocation policies described in this joint proxy statement/prospectus to serve as guidelines in making decisions regarding the relationships among the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group with respect to matters such as tax liabilities and benefits, intergroup loans, intergroup interests, attribution of assets, financing alternatives, corporate opportunities and similar items. These policies are expected to set forth the initial focuses and strategies of these groups and the initial attribution of Liberty Media’s businesses, assets and liabilities among them in connection with the Reclassification. See “The Reclassification Proposals — Management and Allocation Policies.” These policies are not and will not be included in the Liberty Media restated charter. Liberty Media’s board of directors may at any time change or make exceptions to these policies. Because these policies relate to matters concerning the day-to-day management of Liberty Media as opposed to significant corporate actions, such as a merger involving Liberty Media or a sale of substantially all of Liberty Media’s assets, no stockholder approval was required with respect to their adoption or amendment. A decision to change, or make exceptions to, these policies or adopt additional policies could disadvantage one or more groups while advantaging the other(s).

Holders of shares of stock relating to a particular group may not have any remedies if any action by Liberty Media’s directors or officers has an adverse effect on only that stock, or on a particular series of that stock.

Principles of Delaware law and the provisions of the Liberty Media restated charter may protect decisions of Liberty Media’s board of directors that have a disparate impact upon holders of shares of stock relating to a particular group, or upon holders of any series of stock relating to a particular group. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of Liberty Media’s stockholders, regardless of the stock, or series, they hold. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all stockholders and does not have separate or additional duties to any subset of stockholders. Judicial opinions in Delaware involving tracking stocks have established that decisions by directors or officers involving differing treatment of holders of tracking stocks may be judged under the business judgment rule. In some circumstances, Liberty Media’s directors or officers may be required to make a decision that is viewed as adverse to the holders of shares relating to a particular group or to the holders of a particular series of that stock. Under the principles of Delaware law and the business judgment rule referred to above, you may not be able to successfully challenge decisions that you believe have a disparate impact upon the stockholders of one of Liberty Media’s groups if a majority of Liberty Media’s board of directors is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of Liberty Media and all of Liberty Media’s stockholders.

Stockholders will not vote on how to attribute consideration received in connection with a merger involving Liberty Media among holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock.

The Liberty Media restated charter does not contain any provisions governing how consideration received in connection with a merger or consolidation involving Liberty Media is to be attributed to the holders of New Liberty SiriusXM common stock, holders of New Liberty Formula One common stock and holders of Liberty Live common stock or to the holders of different series of stock, and none of the holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock will have a separate class vote in the event of such a merger or consolidation. Consistent with applicable principles of Delaware law, Liberty Media’s board of directors will seek to divide the type and amount of consideration received in a merger or consolidation involving Liberty Media among holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock in a fair manner. As the different ways the board of directors may divide the consideration between holders of stock relating to the different groups, and among holders of different series of a particular stock, might have materially different results, the consideration to be received by holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock in any

 

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such merger or consolidation may be materially less valuable than the consideration they would have received if they had a separate class vote on such merger or consolidation.

Liberty Media may dispose of assets of the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group without your approval.

Delaware law requires stockholder approval only for a sale or other disposition of all or substantially all of the assets of Liberty Media taken as a whole, and the Liberty Media restated charter does not require a separate class vote in the case of a sale of a significant amount of assets of any of Liberty Media’s groups. As long as the assets attributed to the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group proposed to be disposed of represent less than substantially all of Liberty Media’s assets, Liberty Media may approve sales and other dispositions of any amount of the assets of such group without any stockholder approval.

If Liberty Media disposes of all or substantially all of the assets attributed to any group (which means, for this purpose, assets representing 80% of the fair market value of the total assets of the disposing group, as determined by Liberty Media’s board of directors), Liberty Media would be required under the terms of the Liberty Media restated charter, if the disposition is not an exempt disposition under the terms of the Liberty Media restated charter, to choose one or more of the following three alternatives:

•

declare and pay a dividend on the disposing group’s common stock;

​

•

redeem shares of the disposing group’s common stock in exchange for cash, securities or other property; and/or

​

•

convert all or a portion of the disposing group’s outstanding common stock into common stock of another group.

​

See “Description of Liberty Media Capital Stock and Comparison of Stockholder Rights.”

In this type of a transaction, holders of the disposing group’s common stock may receive less value than the value that a third-party buyer might pay for all or substantially all of the assets of the disposing group.

Liberty Media’s board of directors will decide, in its sole discretion, how to proceed and is not required to select the option that would result in the highest value to holders of any stock related to a particular group.

Holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock may receive less consideration upon a sale of the assets attributed to that group than if that group were a separate company.

If any of the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group were a separate, independent company and its shares were acquired by another person, certain costs of that sale, including corporate level taxes, might not be payable in connection with that acquisition. As a result, stockholders of a separate, independent company with the same assets might receive a greater amount of proceeds than the holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock would receive upon a sale of all or substantially all of the assets of the group to which their shares relate. In addition, Liberty Media cannot assure you that in the event of such a sale the per share consideration to be paid to holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock, as the case may be, will be equal to or more than the per share value of that share of stock prior to or after the announcement of a sale of all or substantially all of the assets of the applicable group. Further, there is no requirement that the consideration paid be tax-free to the holders of the shares of common stock related to that group. Accordingly, if Liberty Media sells all or substantially all of the assets attributed to the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group, Liberty Media’s stockholders could suffer a loss in the value of their investment in Liberty Media’s common stock.

 

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In the event of a liquidation of Liberty Media, holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will not have a priority with respect to the assets attributed to the related tracking stock group remaining for distribution to stockholders.

Under the Liberty Media restated charter, upon Liberty Media’s liquidation, dissolution or winding up, holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will be entitled to receive, in respect of their shares of such stock, an interest in all of Liberty Media’s assets, if any, remaining for distribution to holders of common stock in proportion to their respective number of “liquidation units” per share. As of the record date, each share of Liberty SiriusXM common stock was attributed [           ] of a liquidation unit and each share of Liberty Formula One common stock was attributed [      ] of a liquidation unit. Pursuant to the Reclassification, the fraction of a liquidation unit attributable to the Liberty SiriusXM common stock will be allocated between the New Liberty SiriusXM common stock and the Liberty Live common stock, and the fraction of a liquidation unit attributable to the Liberty Formula One common stock will be allocated between New Liberty Formula One common stock and Liberty Live common stock, in each case, as set forth in “Description of Liberty Media Capital Stock and Comparison of Stockholder Rights.” Hence, the assets to be distributed to a holder of tracking stock upon a liquidation, dissolution or winding up of Liberty Media will have nothing to do with the value of the assets attributed to the related tracking stock group or to changes in the relative value of the New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock over time.

Liberty Media’s board of directors may, in its sole discretion, elect to convert the common stock relating to one group into common stock relating to another group, thereby changing the nature of your investment and possibly diluting your economic interest in Liberty Media, which could result in a loss in value to you.

The Liberty Media restated charter will permit Liberty Media’s board of directors, in its sole discretion, to convert all of the outstanding shares of common stock relating to any of Liberty Media’s groups into shares of common stock of another group on terms described in paragraphs (b)(ii)-(vii) of Article IV, Section A.2 of the Liberty Media restated charter included in this joint proxy statement/prospectus as Annex C. A conversion would preclude the holders of stock related to each group involved in such conversion from retaining their investment in a security that is intended to reflect separately the performance of the relevant group. Liberty Media cannot predict the impact on the market value of Liberty Media’s common stock of (1) Liberty Media’s board of directors’ ability to effect any such conversion or (2) the exercise of this conversion right by Liberty Media’s board. In addition, Liberty Media’s board of directors may effect such a conversion at a time when the market value of Liberty Media’s different stocks could cause the stockholders of one group to be disadvantaged.

Holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock will vote together and will have limited separate voting rights.

Holders of New LSXMA and New LSXMB, New FWONA and New FWONB and LLYVA and LLYVB will vote together as a single class, except in certain limited circumstances prescribed by the Liberty Media restated charter and under Delaware law. Each share of Series B common stock of each group will have ten votes per share, and each share of Series A common stock of each group will have one vote per share. Holders of Series C common stock of each group will have no voting rights, other than those required under Delaware law. When holders of New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock vote together as a single class, holders having a majority of the votes will be in a position to control the outcome of the vote even if the matter involves a conflict of interest among Liberty Media’s stockholders or has a greater impact on one group than another.

Transactions in New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock by Liberty Media’s insiders could depress the market price of those stocks.

Sales of, or hedging transactions such as collars relating to, shares of New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock by Liberty Media’s Chairman of the Board, or any of Liberty Media’s other directors or executive officers, could cause a perception in the marketplace that the stock price of the relevant shares has peaked or that adverse events

 

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or trends have occurred or may be occurring at Liberty Media or the group to which the shares relates. This perception can result notwithstanding any personal financial motivation for these transactions. As a result, insider transactions could depress the market price for shares of the New Liberty SiriusXM common stock, New Liberty Formula One common stock or Liberty Live common stock.

Liberty Media’s capital structure, as well as the fact that the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group are not independent companies, may inhibit or prevent acquisition bids for the businesses attributed to the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group and may make it difficult for a third party to acquire Liberty Media, even if doing so may be beneficial to Liberty Media’s stockholders.

If the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group were separate independent companies, any person interested in acquiring the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group without negotiating with management could seek control of that group by obtaining control of its outstanding voting stock, by means of a tender offer or a proxy contest. Although Liberty Media intends the New Liberty SiriusXM common stock, New Liberty Formula One common stock and Liberty Live common stock to reflect the separate economic performance of the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group, respectively, those groups are not separate entities and a person interested in acquiring only one group without negotiation with Liberty Media’s management could obtain control of that group only by obtaining control of a majority in voting power of all of the outstanding voting shares of Liberty Media. The existence of shares of common stock, and different series of shares, relating to different groups could present complexities and in certain circumstances pose obstacles, financial and otherwise, to an acquiring person that are not present in companies that do not have a capital structure similar to that of Liberty Media.

Certain provisions of the Liberty Media restated charter and bylaws may discourage, delay or prevent a change in control of Liberty Media that a stockholder may consider favorable. These provisions include:

•

authorizing a capital structure with multiple series of common stock: a Series B common stock related to each group that entitles the holders to ten votes per share, a Series A common stock related to each group that entitles the holder to one vote per share, and a Series C common stock related to each group that, except as otherwise required by Delaware law, entitles the holder to no voting rights;

​

•

classifying Liberty Media’s board of directors with staggered three-year terms, which may lengthen the time required to gain control of Liberty Media’s board of directors;

​

•

limiting who may call special meetings of stockholders;

​

•

prohibiting stockholder action by written consent, thereby requiring all stockholder action to be taken at a meeting of the stockholders;

​

•

establishing advance notice requirements for nominations of candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;

​

•

requiring stockholder approval by holders of at least 662∕3% of Liberty Media’s aggregate voting power or the approval by at least 75% of Liberty Media’s board of directors with respect to certain extraordinary matters, such as a merger or consolidation of Liberty Media, a sale of all or substantially all of Liberty Media’s assets or an amendment to the Liberty Media restated charter; and

​

•

the existence of authorized and unissued stock, including “blank check” preferred stock, which could be issued by Liberty Media’s board of directors to persons friendly to its then current management, thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control of Liberty Media.

​

Immediately following the Reclassification, Liberty Media’s chairman, Mr. Malone, is expected to beneficially own shares (based on Mr. Malone’s beneficial ownership of Liberty SiriusXM common stock and Liberty Formula One common stock and outstanding share information, in each case, as of [      ]) representing the power to direct approximately [      ]% of the aggregate voting power in Liberty Media, due to his beneficial ownership of approximately [     ]% of the outstanding shares of LSXMB and approximately [     ]% of the outstanding shares of FWONB as of [      ]).

 

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The Reclassification could result in significant tax liability.

The Reclassification is conditioned upon the receipt by Liberty Media of the opinion of Skadden Arps, tax counsel to Liberty Media, to the effect that, among other things, the Reclassification will qualify as a tax-free reorganization under Section 368(a) and related provisions of the Code to Liberty Media and to holders of Liberty SiriusXM common stock and Liberty Formula One common stock (except with respect to the receipt of any cash in lieu of fractional shares). Liberty Media will not obtain a private letter ruling from the IRS regarding (i) determination that the Liberty Media tracking stocks (before and after the Reclassification) constitute stock of Liberty Media for U.S. federal income tax purposes, (ii) the qualification of the Reclassification as a reorganization under Section 368(a)(1)(E) of the Code, or (iii) the characterization of the tracking stock under Section 306 of the Code. The legal authorities upon which the opinions of Skadden Arps will be based are subject to change or differing interpretations at any time, possibly with retroactive effect. Opinions of counsel are not binding on the IRS or the courts, and there can be no assurance that the IRS will not challenge the conclusions reached in such opinion or that a court would not sustain such a challenge. In addition, there are no Code provisions, U.S. Treasury Regulations, court decisions, or published rulings of the IRS directly addressing the characterization of stock with characteristics similar to the Liberty SiriusXM common stock, Liberty Formula One common stock, New Liberty SiriusXM common stock, New Liberty Formula One common stock, and Liberty Live common stock. The IRS has also announced that it will not issue rulings on the characterization of tracking stock. Therefore, the tax treatment of the Reclassification is not entirely certain. If, for any reason, the IRS were to successfully assert that the Reclassification does not qualify as a tax-free reorganization, Liberty Media and holders of Liberty SiriusXM common stock and Liberty Formula One common stock could incur significant tax liabilities. For a more complete discussion of the tax opinion and the tax consequences if the Reclassification is not tax-free, please see “U.S. Federal Income Tax Consequences — Tax Opinions” and “— U.S. Federal Income Tax Treatment of the Reclassification.”

In addition, due to the absence of authorities relating directly to the characterization of tracking stock under Section 306 of the Code, there is also a risk that the IRS could successfully assert that the New Liberty SiriusXM common stock, New Liberty Formula One common stock and/or Liberty Live common stock is “Section 306 stock,” within the meaning of Section 306(c) of the Code. If any of Liberty Media’s stock were determined to be Section 306 stock, a holder of such stock could be required to recognize ordinary income on the subsequent sale or exchange of such stock, or dividend income on any redemption of such stock, in each case without regard to such holder’s basis in such stock, and generally would not be permitted to recognize any loss on such disposition, as described in more detail below under “U.S. Federal Income Tax Consequences — U.S. Federal Income Tax Treatment of the Reclassification — Section 306 Stock.”

Liberty Media’s tracking stock groups may bear responsibility for significant tax liabilities as a result of the attribution of such tax liabilities pursuant to the management and allocation policies or due to the several liability of members of Liberty Media’s consolidated or combined group under applicable tax laws.

In connection with the Reclassification, Liberty Media intends to implement the management and allocation policies described in this joint proxy statement/prospectus, including tax sharing policies that will govern the allocation of taxes, tax benefits, certain tax sharing agreement payments and losses among Liberty Media’s tracking stock groups. Among other things, the tax sharing policies will provide for the allocation of any taxes or losses that may result from the Split-Off Transactions (to the extent SplitCo is not responsible for such taxes or losses under the Tax Sharing Agreement) or the Reclassification and will also provide for the allocation of taxes or losses that may arise from certain potential future separation transactions involving either a separation of the businesses, assets or liabilities attributed to the New Liberty SiriusXM Group or a separation of the businesses, assets, or liabilities attributed to the New Formula One Group and the Liberty Live Group. In particular, any taxes and losses resulting from the Split-Off Transactions (to the extent SplitCo is not responsible for such taxes or losses under the Tax Sharing Agreement) or the Reclassification will be allocated to each of Liberty Media’s tracking stock groups proportionately based upon the relative market capitalizations of the stock of each group, except that taxes and losses resulting from (i) the Formula One Distribution will be allocated to the New Formula One Group and (ii) the Liberty Media Exchange will be allocated to the New Liberty SiriusXM Group. Further, the tax sharing policies will provide that if any future separation transaction were to fail to qualify as tax-free, any taxes and losses resulting from such transaction (to the extent not otherwise allocated pursuant to any tax sharing,

 

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reorganization, merger, separation or similar agreement) would generally be allocated to the Liberty Live Group (or successor group), subject to certain exceptions as described in the tax sharing policies, which, if applicable, would generally allocate a portion of such taxes and losses to the New Formula One Group (or successor group). If the Split-Off Transactions, the Reclassification or any future separation transaction were determined to be taxable to Liberty Media, Liberty Media would incur significant tax liabilities, and these liabilities (to the extent not otherwise allocated pursuant to any tax sharing, reorganization, merger, separation or similar agreement) would be allocated among Liberty Media’s tracking stock groups (or successor groups) in accordance with the tax sharing policies. For a more complete description of the tax sharing policies, please see “The Reclassification Proposals — Management and Allocation Policies — Taxes.”

However, notwithstanding the tax sharing policies, under U.S. Treasury Regulations, each member of a consolidated group is severally liable for the U.S. federal income tax liability of each other member of the consolidated group. Accordingly, each member of Liberty Media’s affiliated group for U.S. federal income tax purposes (whether or not such member is attributed to the New Liberty SiriusXM Group, the New Formula One Group or the Liberty Live Group) could be liable to the U.S. government for any U.S. federal income tax liability incurred, but not discharged, by any other member of the affiliated group (or any tax liabilities of other members of any consolidated or combined groups under similar provisions of other applicable tax laws), which may be substantial.

Risks Relating to an Investment in Liberty Media as a Whole

The success of businesses attributed to each of Liberty Media’s tracking stock groups, in part, depends on their popularity with audiences, which is difficult to predict.

Entertainment content production, satellite radio services and live entertainment events, including sporting events, are inherently risky businesses because the revenue derived from these businesses depends primarily upon their popularity with public audiences, which is difficult to predict. The commercial success of a satellite radio program or live entertainment depends upon the quality and acceptance of competing programs, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, many of which are difficult to predict. In the case of ad-supported programming, events and satellite radio service, audience size is an important factor when advertising rates are negotiated. Audience size is also an important factor when determining ticket pricing for live entertainment events and the value of broadcast rights. Consequently, low public acceptance of the programs, services and events provided by companies such as Sirius XM Holdings, Live Nation and Formula 1 could hurt the ability of these companies to maintain or grow revenue, which would adversely impact the financial performance of the groups to which these companies are attributed.

Liberty Media’s businesses attributed to the New Liberty SiriusXM Group, the New Formula One Group and the Liberty Live Group, such as Sirius XM Holdings, Formula 1 and Live Nation, may not realize the benefits of acquisitions or other strategic investments and initiatives.

Liberty Media’s business strategy and that of its subsidiaries and business affiliates, including Sirius XM Holdings, Formula 1 and Live Nation, may include selective acquisitions, other strategic investments and initiatives that allow them to expand their business. The success of any acquisition depends upon effective integration and management of acquired businesses and assets into the acquirer’s operations, which is subject to risks and uncertainties, including the realization of the growth potential, any anticipated synergies and cost savings, the ability to retain and attract personnel, the diversion of management’s attention from other business concerns, and undisclosed or potential legal liabilities of acquired businesses or assets.

Weak and uncertain economic conditions may reduce consumer demand for products, services and events offered by Liberty Media’s businesses attributed to each of its groups.

A weak or uncertain economy in the U.S., or in the case of the Formula One Group, abroad could adversely affect demand for Liberty Media’s products, services and events. A substantial portion of Liberty Media’s revenue is derived from discretionary spending by individuals, which typically falls during times of economic recession or instability. A reduction in discretionary spending could adversely affect revenue through potential downgrades by satellite radio subscribers and could overall affect subscriber churn,

 

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conversion rates and vehicle sales (in the case of Sirius XM Holdings) or reduced live-entertainment and sporting event expenditures (in the case of Formula 1 and Live Nation). Accordingly, the ability of Liberty Media’s businesses attributed to each of its groups to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments remain weak or decline further. In addition, inflation, which has significantly risen, may increase operational costs, including labor costs, and continued increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty and heightening these risks. Liberty Media currently is unable to predict the extent of any of these potential adverse effects.

The unfavorable outcome of pending or future litigation could have a material adverse impact on the operations and financial condition of businesses attributed to each of Liberty Media’s groups.

Liberty Media’s subsidiaries and business affiliates are parties to several legal proceedings arising out of various aspects of their businesses, including class actions arising out of their marketing practices. The outcome of these proceedings may not be favorable, and one or more unfavorable outcomes could have a material adverse impact on their financial condition, which can impact the financial performance of the group to which they are attributed.

Certain of Liberty Media’s subsidiaries and business affiliates have operations outside of the U.S. that are subject to numerous operational risks.

Certain of Liberty Media’s subsidiaries and business affiliates have operations in countries other than the U.S. In many foreign countries, particularly in certain developing economies, it is not uncommon to encounter business practices that are prohibited by certain regulations, such as the Foreign Corrupt Practices Act and similar laws. Although certain of its subsidiaries and business affiliates have undertaken compliance efforts with respect to these laws, their respective employees, contractors and agents, as well as those companies to which they outsource certain of their business operations, may take actions in violation of their policies and procedures. Any such violation, even if prohibited by the policies and procedures of these subsidiaries and business affiliates or the law, could have certain adverse effects on the financial condition and reputation of these subsidiaries and business affiliates. Any failure by these subsidiaries and business affiliates to effectively manage the challenges associated with the international operation of their businesses could materially adversely affect their, and hence Liberty Media’s, financial condition.

Formula 1 and Live Nation have been, and may continue to be, materially impacted by COVID-19 and may be materially impacted by a future pandemic or epidemic.

Although Formula 1 and Live Nation saw a more complete return to normal business operations, schedules and events in 2022, it is unclear whether and to what extent COVID-19 concerns or a future pandemic or epidemic, will impact the use of and/or demand for the entertainment, events and services provided by these businesses and demand for sponsorship and advertising assets. If these businesses face cancelled events, closed venues and reduced attendance, the impact may substantially decrease Liberty Media’s revenue. Due to the revenue reductions caused by COVID-19 in 2020 and 2021, these businesses have looked to reduce expenses, but should such impacts resume, the businesses may not be able to reduce expenses to the same degree as any decline in revenue, which may adversely affect Liberty Media’s results of operations and cash flow.

In addition, Liberty Media’s businesses are particularly sensitive to reductions in travel and discretionary consumer spending. Liberty Media cannot predict the time period over which its businesses will be impacted by COVID-19 or a future pandemic or epidemic. Over the long-term, COVID-19 or a future pandemic or epidemic could impede economic activity in impacted regions or globally, causing a global recession, leading to a further decline in discretionary spending on sports and entertainment events and other leisure activities, which could result in long-term effects on Liberty Media’s businesses.

Even as Liberty Media’s businesses resume more normal operations, there can be no assurances that fans attending events or vendors and employees working at Liberty Media’s events will not contract COVID-19 or another illness in the course of attending or providing services. Any such occurrence could result in litigation, legal and other costs and reputational risk that could materially and adversely impact Liberty Media’s businesses and results of operations. Even after the COVID-19 pandemic subsides, the U.S.

 

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economy may experience a recession, and Liberty Media anticipates its businesses and operations could be materially adversely affected by a prolonged recession in the U.S.

For the reasons set forth above and other reasons that may come to light as a result of the ongoing COVID-19 pandemic or a future pandemic or epidemic, Liberty Media cannot reasonably estimate the impact to its future revenue, results of operations, cash flows or financial condition, but such impacts have been and will continue to be significant and could have a material adverse effect on our business, revenue, results of operations, cash flows and financial condition.

Risks Relating to the New Liberty SiriusXM Group

Sirius XM Holdings has been, and may continue to be, adversely affected by supply chain issues.

The issues associated with the global supply chain for parts and components is having wide-ranging effects across multiple industries, including direct and indirect effects on Sirius XM Holdings’ business.

Automakers are experiencing, and may continue to experience, delays in securing certain components that are essential to the production of new vehicles for a variety of reasons, including due to the global semiconductor supply shortage and the war in Ukraine. These affected automakers manufacture and sell vehicles that include Sirius XM Holdings’ satellite radios. For example, some automobile plants in North America and elsewhere have at times halted or reduced vehicle production due to the shortage of certain components used in the production of their vehicles. As a result, these supply chain shortages have had, and may continue to have, an impact on new vehicle production and deliveries, which in turn may affect Sirius XM Holdings’ subscriber acquisition efforts.

Sirius XM Holdings also has experienced, and may continue to experience, delays in securing certain application specific integrated circuits (which are commonly referred to as “chipsets”) that are essential components of its satellite radios. Delays or the unavailability of these components could have an adverse impact on Sirius XM Holdings’ operations and financial conditions.

Sirius XM Holdings may be adversely affected by the war in Ukraine.

The war in Ukraine, and any expansion of the war in Ukraine to surrounding areas, could adversely affect Sirius XM Holdings’ business and operations.

The war in Ukraine could affect the supply of certain components that Sirius XM Holdings relies on in connection with its business and operations, such as software and certain subsystems that may be planned to be integrated as part of Sirius XM Holdings’ satellites currently under construction for its system. In addition, Sirius XM Holdings’ AdsWizz (defined below) subsidiary is headquartered in Romania and Sirius XM Holdings relies on other contractors in Eastern European countries, such as Poland. An expansion of the war in Ukraine to other countries, particularly Romania, could materially affect Sirius XM Holdings’ ability to deliver advertisements on its Pandora services and for third parties.

Sirius XM Holdings faces substantial competition and that competition is likely to increase over time.

Sirius XM Holdings competes for the time and attention of its listeners with other content providers on the basis of a number of factors, including quality of experience, relevance, acceptance and perception of content quality, ease of use, price, accessibility, brand awareness, reputation and, in the case of its ad-supported Pandora service, perception of ad load, features and functionality. As consumer tastes and preferences change on the internet and with mobile and other connected products, including cars, in-home, and wearable devices, Sirius XM Holdings will need to enhance and improve its existing services, introduce new services and features, and attempt to maintain its competitive position with additional technological advances and adaptable platforms. Neither the Sirius XM App nor the Pandora App has been significantly updated in several years. If Sirius XM Holdings fails to keep pace with technological advances or fails to offer compelling product offerings and state-of-the-art delivery platforms to meet consumer demands, its ability to grow or maintain the reach of its services, attract and retain users, and attract listeners and subscribers across its services will be adversely affected. Sirius XM Holdings’ ability to attract and retain subscribers and listeners also depends on its success in creating and providing popular or unique programming.

 

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A summary of certain services that compete with Sirius XM Holdings is contained in the section entitled “Description of Liberty Media’s Business Following the Reclassification – Competition”.

Sirius XM Holdings’ subscribers and listeners can obtain similar content for free through terrestrial radio stations, YouTube and other internet services. Sirius XM Holdings also competes for the time and attention of its listeners with providers of other in-home and mobile entertainment services, and it competes for advertising sales with large scale online advertising platforms, such as Amazon, Facebook and Google, and with traditional media outlets.

Sirius XM Holdings’ streaming services also compete for listeners on the basis of the presence and visibility of its apps, which are distributed via app stores operated by Apple and Google. Sirius XM Holdings faces significant competition for listeners from these companies, which also promote their own music and content. In addition, Sirius XM Holdings’ competitors’ streaming products may be pre-loaded or integrated into consumer electronics products or automobiles more broadly than Sirius XM Holdings’ streaming products, creating a visibility advantage. If Sirius XM Holdings is unable to compete successfully for listeners against other media providers, then its business may suffer. Additionally, the operator of an app store may reject Sirius XM Holdings’ app or amend the terms of their license in a way that inhibits Sirius XM Holdings’ ability to distribute its apps, negatively affects its business, or limits its ability to increase subscribers and listeners.

Competition could result in lower subscription, advertising or other revenue and an increase in Sirius XM Holdings’ expenses and, consequently, lower its earnings and free cash flow. Sirius XM Holdings cannot provide assurance that it will be able to compete successfully with its existing or future competitors or that competition will not have an adverse impact on its operations and financial condition.

If Sirius XM Holdings’ efforts to attract and retain subscribers and listeners, or convert listeners into subscribers, are not successful, its business will be adversely affected.

Sirius XM Holdings’ business will be adversely affected if it is unable to attract new subscribers and listeners and retain its current subscribers and listeners.

Sirius XM Holdings’ ability to increase the number of subscribers and listeners to its services, retain its subscribers and listeners or convert listeners into subscribers, is uncertain and subject to many factors, including:

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the price of Sirius XM Holdings’ service;

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the ease of use of Sirius XM Holdings’ service;

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the effectiveness of Sirius XM Holdings’ marketing programs;

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with respect to its Sirius XM service, the sale or lease rate of new vehicles in the United States;

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the rate at which Sirius XM Holdings’ self-pay subscribers to its Sirius XM service buy and sell new and used vehicles in the United States;

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Sirius XM Holdings’ ability to convince owners and lessees of new and used vehicles that include satellite radios to purchase subscriptions to its Sirius XM service;

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the perceived value of Sirius XM Holdings’ programming and the packages and services it offers;

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Sirius XM Holdings’ ability to introduce features in a manner that is favorably received by its consumers;

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Sirius XM Holdings’ ability to keep up with rapidly evolving technology and features in audio entertainment;

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Sirius XM Holdings’ ability to respond to evolving consumer tastes; and

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actions by Sirius XM Holdings’ competitors, such as Spotify, Apple, Google, Amazon, Facebook and other audio entertainment and information providers.

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Sirius XM Holdings engages in extensive marketing efforts and the continued effectiveness of those efforts is an important part of its business.

Sirius XM Holdings engages in extensive marketing efforts across a broad range of media to attract and retain subscribers and listeners to its services. Sirius XM Holdings employs a wide variety of communications tools as part of its marketing campaigns, including telemarketing efforts and email solicitations. The effectiveness of its marketing efforts is affected by a broad range of factors, including creative and execution factors. Sirius XM Holdings’ ability to reach consumers with radio and television advertising, direct mail materials, email solicitations and telephone calls is an important part of its efforts and a significant factor in the effectiveness of its marketing. If Sirius XM Holdings is unable to reach consumers through email solicitations or telemarketing, including as a result of “spam” and email filters, call blocking technologies, consumer privacy regulations or “do-not-call” or other marketing regulations, its marketing efforts will be adversely affected. A decline in the effectiveness of its marketing efforts could have an adverse impact on its operations and financial condition.

Sirius XM Holdings relies on third parties for the operation of its business, and the failure of third parties to perform could adversely affect its business.

Sirius XM Holdings’ business depends, in part, on various third parties, including:

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manufacturers that build and distribute satellite radios;

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companies that manufacture and sell integrated circuits for satellite radios;

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third-party software that supports Sirius XM Holdings’ apps and services;

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programming providers, including agreements with owners of various copyrights in music, and on-air talent;

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vendors that operate its call centers;

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vendors that have designed or built, and vendors that support or operate, other important elements of Sirius XM Holdings’ systems, including its satellites and “cloud”-based systems;

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Apple, who distributes Sirius XM Holdings’ apps through its App Store and who, in the case of the Pandora service, Sirius XM Holdings relies on to collect fees and approve the terms of its consumer offers; and

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Google, who distributes Sirius XM Holdings’ apps through its App Store and who Sirius XM Holdings, in the case of the Pandora service, relies on to collect fees and approve the terms of its consumer offers, and who plays an important role in the fulfillment of the ads Sirius XM Holdings sells on its Pandora platform.

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If one or more of these third parties do not perform in a satisfactory or timely manner, including complying with Sirius XM Holdings’ standards and practices relating to business integrity, personnel and cybersecurity, its business could be adversely affected.

The operation of Sirius XM Holdings’ apps and service offerings could be impaired if errors occur in the third party software that supports Sirius XM Holdings’ apps and services. It is difficult for Sirius XM Holdings to correct any defects in third party software because the development and maintenance of the software is not within its control. Sirius XM Holdings’ third party licensors may not continue to make their software available to Sirius XM Holdings on acceptable terms, invest the appropriate levels of resources in their software to maintain and enhance its capabilities, or remain in business. Failure of these third-party licensors could harm Sirius XM Holdings’ streaming services.

In addition, a number of third parties on which Sirius XM Holdings depends have experienced, and may in the future experience, financial difficulties or file for bankruptcy protection. Such third parties may not be able to perform their obligations to Sirius XM Holdings in a timely manner, if at all, as a result of their financial condition or may be relieved of their obligations to Sirius XM Holdings as part of seeking bankruptcy protection.

 

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Failure to successfully monetize and generate revenue from podcasts and other non-music content could adversely affect Sirius XM Holdings’ business, operating results, and financial condition.

Delivering podcasts and other non-music content involves risks and challenges, including increased competition and the need to develop new relationships with creators. Sirius XM Holdings has entered into multi-year commitments for original podcast content that is produced by third parties. These agreements generally provide Sirius XM Holdings the right to distribute the content and act as the exclusive agent for the sale of advertising in the podcasts. Payment terms for certain podcast content typically requires more upfront cash payments, including minimum guarantees to the owner or creator of the podcast, than other content licenses or arrangements.

Given the multiple-year duration and largely fixed-cost nature of such commitments, if the attractiveness of such podcast content to Sirius XM Holdings’ listeners and subscribers do not meet its expectations, Sirius XM Holdings’ margins could be adversely impacted. In addition, the advertising market for podcasts is still developing, including the advertising technology necessary to efficiently sell podcast advertising at scale. As a result, Sirius XM Holdings’ ability to profitably monetize the available advertising opportunities in podcasts remains uncertain.

Growing Sirius XM Holdings’ podcasting business may require additional changes to its business model and cost structure, modifications to its infrastructure, and could expose Sirius XM Holdings (and potentially Liberty Media as a parent company of Sirius XM Holdings) to new regulatory, legal and reputational risks, including infringement liability. There is no guarantee that Sirius XM Holdings will be able to generate sufficient revenue from podcasts to offset the costs of creating or acquiring this content. Sirius XM Holdings’ failure to successfully monetize and generate revenue from such content, including failure to obtain or retain rights to podcasts or other non-music content on acceptable terms, or at all, or to effectively manage the numerous risks and challenges associated with such expansion, could adversely affect Sirius XM Holdings’ business, operating results and financial condition.

Sirius XM Holdings may not realize the benefits of acquisitions or other strategic investments and initiatives.

Sirius XM Holdings’ strategy includes selective acquisitions, other strategic investments and initiatives in an effort to expand its business. The success of any acquisition depends upon effective integration, cultural assimilation and management of acquired businesses and assets into its operations, which is subject to risks and uncertainties, including realizing the growth potential, the anticipated synergies and cost savings, the ability to retain and attract personnel, the diversion of management’s attention for other business concerns, and undisclosed or potential legal liabilities of the acquired business or assets.

The integration process could distract Sirius XM Holdings’ management, disrupt its ongoing business or result in inconsistencies in Sirius XM Holdings’ services, standards, controls, procedures and policies, any of which could adversely affect its ability to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the acquisition.

The ongoing COVID-19 pandemic, and a future pandemic or epidemic, has introduced and may continue to introduce significant uncertainty to Sirius XM Holdings’ business.

The COVID-19 pandemic has also introduced significant uncertainties to Sirius XM Holdings’ business. The extent to which the COVID-19 pandemic may impact Sirius XM Holdings’ results depends on future developments, which are highly uncertain, including the resurgence of COVID-19 and its variants that may be occurring. Another broad shutdown of businesses, either in the U.S. or globally, as a result of the COVID-19 pandemic would likely have an adverse effect on Sirius XM Holdings’ business.

The impact of economic conditions may adversely affect Sirius XM Holdings’ business, operating results, and financial condition.

Sirius XM Holdings’ success depends to a significant extent on discretionary consumer spending. Some of the factors that may influence consumer spending on entertainment include general economic

 

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conditions, the availability of discretionary income, consumer confidence, interest rates, inflationary pressure, and general uncertainty regarding the overall economic environment.

The demand for entertainment generally is sensitive to downturns in the economy and the corresponding impact on discretionary consumer spending. Any actual or perceived deterioration or weakness in general, regional or local economic conditions, as well as other adverse economic or market conditions due to COVID-19 or otherwise, could reduce Sirius XM Holdings’ subscribers’ or potential subscribers’ discretionary income. To the extent that overall economic conditions reduce spending on discretionary items, Sirius XM Holdings’ ability to attract and retain subscribers could be hindered, which could reduce its subscription revenue and negatively impact its business.

Additionally, Sirius XM Holdings’ financial performance is subject to economic conditions and their impact on levels of advertising spending. Expenditures by advertisers generally tend to reflect overall economic conditions, and reductions in spending by advertisers could have an adverse impact on Sirius XM Holdings’ revenue and business. See “Pandora generates a significant portion of its revenue from advertising, and reduced spending by advertisers could harm its business.”

A substantial number of Sirius XM service subscribers periodically cancel their subscriptions and Sirius XM Holdings cannot predict how successful it will be at retaining customers.

As part of Sirius XM Holdings’ business, it experiences, and expects to experience in the future, subscriber turnover (i.e., churn). If Sirius XM Holdings is unable to retain current subscribers at expected rates, or the costs of retaining subscribers are higher than expected, its financial performance and operating results could be adversely affected.

Sirius XM Holdings cannot predict how successful it will be at retaining customers who purchase or lease vehicles that include a subscription to its Sirius XM service. A substantial percentage of Sirius XM subscribers are on discounted pricing plans and Sirius XM Holdings’ ability to retain these subscribers or migrate them to higher priced plans is uncertain. Sirius XM Holdings discounted pricing strategy is widely known, and this may interfere with its ability to collect its ordinary subscription prices. In addition, a substantial number of those subscribers periodically cancel their subscriptions when offered a subscription at a higher price.

Sirius XM Holdings’ ability to profitably attract and retain subscribers to its Sirius XM service is uncertain.

A number of factors may affect Sirius XM Holdings’ ability to attract and retain subscribers to its Sirius XM service. Over time the changing demographics of Sirius XM Holdings’ subscriber base, such as the increase in “Millennial generation customers,” may increase the number of subscribers accustomed to consuming entertainment through ad-supported products. These changing demographics may affect Sirius XM Holdings’ ability to convert trial subscribers into self-paying subscribers. Similarly, Sirius XM Holdings’ efforts to acquire subscribers purchasing or leasing used vehicles may attract price sensitive consumers. Consumers purchasing or leasing used vehicles may be more price sensitive than consumers purchasing or leasing new vehicles, may convert from trial subscribers to self-paying subscribers at a lower rate, and may cancel their subscriptions more frequently than consumers purchasing or leasing new vehicles. Some of Sirius XM Holdings’ marketing efforts may also attract more price sensitive subscribers, and its efforts to increase the penetration of satellite radios in new, lower-priced vehicle lines may result in the growth of more economy-minded subscribers. Each of these factors may harm Sirius XM Holdings’ revenue or require additional spending on marketing efforts to demonstrate the value of its Sirius XM service.

Sirius XM Holdings’ business depends in part upon the auto industry.

A substantial portion of the subscription growth for Sirius XM Holdings’ satellite radio service has come from purchasers and lessees of new and used automobiles in the United States, and Sirius XM Holdings expects this to be an important source of subscribers for its satellite radio service in the future.

Sirius XM Holdings has agreements with major automakers to include satellite radios in new vehicles, although these agreements do not require automakers to install specific or minimum quantities of radios in

 

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any given period. These agreements also require automakers to provide Sirius XM Holdings data on sales of satellite radio enabled vehicles, including in many cases the consumer’s name and address. Sirius XM Holdings’ business could be adversely affected if automakers do not continue to include its Sirius XM service in their products or provide Sirius XM Holdings with such data.

Automotive production and sales are dependent on many factors, including the availability of vehicle components, consumer credit, general economic conditions, consumer confidence and fuel costs. To the extent vehicle sales by automakers decline, or the penetration of factory-installed satellite radios in those vehicles is reduced, subscriber growth for Sirius XM Holdings’ satellite radio service may be adversely impacted.

Sales of used vehicles represent a significant source of new subscribers for Sirius XM Holdings’ satellite radio service. Sirius XM Holdings has agreements with auto dealers and companies operating in the used vehicle market to provide it with data on sales of used satellite radio enabled vehicles, including in many cases the consumer’s name and address. The continuing availability of this data is important, and the loss of such data may harm its revenue and business.

Failure of Sirius XM Holdings’ satellites would significantly damage its business.

The lives of the satellites required to operate the Sirius XM service vary depending on a number of factors, including:

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degradation and durability of solar panels;

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quality of construction;

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random failure of satellite components, which could result in significant damage to or loss of a satellite;

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amount of fuel the satellite consumes;

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the performance of third parties that manage the operation of its satellites; and

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damage or destruction as a result of electrostatic storms, terrorist attacks, collisions with other objects in space or other events, such as nuclear detonations, occurring in space.

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In the ordinary course of operation, satellites experience failures of component parts and operational and performance anomalies. Components on several of Sirius XM Holdings’ in-orbit satellites have failed, and from time to time it has experienced anomalies in the operation and performance of these satellites. These failures and anomalies are expected to continue in the ordinary course, and Sirius XM Holdings cannot predict if any of these possible future events will have a material adverse effect on its operations or the life of its existing in-orbit satellites. In addition, the Sirius network of terrestrial repeaters communicates with a single third-party satellite. The XM network of terrestrial repeaters communicates with a single XM satellite. If the satellites communicating with the applicable repeater network fail unexpectedly, the services would be disrupted for several hours or longer.

Any material failure of Sirius XM Holdings’ operating satellites could cause it to lose customers for its Sirius XM service and could materially harm its reputation and its operating results. Sirius XM Holdings does not have insurance for its in-orbit satellites. Additional information regarding Sirius XM Holdings’ fleet of satellites is contained in the section entitled “Description of Liberty Media’s Business Following the Reclassification – Satellites, Terrestrial Repeaters and Other Satellite Facilities”.

The Sirius XM service may experience harmful interference from wireless operations.

The development of applications and services in spectrum adjacent to the frequencies licensed to Sirius XM Holdings, as well as the combination of signals in other frequencies, may cause harmful interference to its satellite radio service in certain areas of the United States. Certain operations or combination of operations permitted by the FCC in spectrum, other than Sirius XM Holdings’ licensed frequencies, results in the loss of signal to its service, and the reception of its satellite radio service can be adversely affected in certain areas. Elimination of this interference may not be possible in all cases. In other cases, Sirius XM Holdings’ efforts to reduce this interference may require extensive engineering efforts and additions to its

 

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terrestrial infrastructure. These mitigation efforts may be costly and take several years to implement and may not be entirely effective. In certain cases, Sirius XM Holdings is dependent on the FCC to assist it in preventing harmful interference to its service.

Pandora’s ad-supported business has suffered a substantial and consistent loss of monthly active users, which may adversely affect its business.

The number of monthly active users to Sirius XM Holdings’ ad-supported Pandora business has declined consistently for several years, including in 2022, and is likely to further contract in the future.

The size of Sirius XM Holdings’ ad-supported listener base is an important element of its Pandora business. The decline in Sirius XM Holdings’ listener base has resulted in fewer listener hours and available advertising spots on its Pandora service, which ultimately may result in declines in advertising revenue, and adversely affect its Pandora business. The contraction of Sirius XM Holdings’ ad-supported listener base also decreases the size of demographic groups targeted by advertisers, which may hurt Sirius XM Holdings’ ability to deliver advertising in a manner that maximizes advertisers’ return on investment and compete with other streaming advertising platforms.

Pandora generates a significant portion of its revenue from advertising, and reduced spending by advertisers could harm its business.

Pandora currently generates a majority of its revenue from third parties advertising on its ad-supported service. As is common in the audio entertainment industry, Pandora’s advertisers do not have long-term advertising commitments with Pandora and can terminate their contracts at any time.

Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions have affected, and may in the future affect, the demand for audio advertising, resulting in fluctuations in the amounts advertisers spend on advertising, which could harm Sirius XM Holdings’ financial condition and operating results.

Sirius XM Holdings’ failure to convince advertisers of the benefits of its Pandora ad-supported service could harm its business.

Sirius XM Holdings’ ability to attract and retain advertisers, and ultimately to sell its advertising inventory, depends on a number of factors, including:

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the number of listener hours on the Pandora ad-supported service, particularly the number of listener hours attributable to high-value demographics;

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keeping pace with changes in technology and its competitors, some of which have significant influence over the distribution of the Pandora app;

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competing effectively for advertising with other dominant online services, such as Spotify, Google and Facebook, as well as other marketing and media outlets;

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successfully competing for local radio advertising;

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demonstrating the ability of advertisements to reach targeted audiences, including the value of mobile digital advertising;

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ensuring that new ad formats and ad product offerings are attractive to advertisers and that inventory management decisions (such as changes to ad load, frequency, prominence and quality of ads that Sirius XM Holdings serves listeners) do not have a negative impact on listener hours; and

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adapting to technologies designed to block the display of its ads.

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Advertisers may leave Sirius XM Holdings for competing alternatives at any time. Failure to demonstrate to advertisers the value of its Pandora service would result in reduced spending by, or loss of, advertisers, which would harm its revenue and business.

 

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If Sirius XM Holdings is unable to maintain revenue growth from its advertising products, its results of operations will be adversely affected.

In order to effectively monetize listener hours, Sirius XM Holdings must, among other things, penetrate local advertising markets and develop compelling ad product solutions.

The substantial majority of the total listening to the Pandora service occurs on mobile devices. Sirius XM Holdings is engaged in efforts to continue to convince advertisers of the capabilities and value of mobile digital advertising and to direct an increasing portion of their advertising spend to its ad-supported Pandora service.

Sirius XM Holdings is continuing to build its sales capability to penetrate local advertising markets, which places Sirius XM Holdings in competition with terrestrial radio. Sirius XM Holdings may not be able to capture an increasing share of local and audio advertising revenue, which may have an adverse impact on its future revenue.

Changes to mobile operating systems and browsers may hinder Sirius XM Holdings’ ability to sell advertising and market its services.

Sirius XM Holdings uses shared common device identifiers that are universal in the advertising technology ecosystem, such as Apple’s Identifier for Advertisers, a random device identifier assigned by Apple to a user’s device. Sirius XM Holdings uses these common device identifiers for targeting, advertising effectiveness and measurement for Pandora’s advertising business and for Pandora’s consumer marketing purposes. These common device identifiers enable Sirius XM Holdings to match audiences, including with second- and third-party data providers and measurement vendors and enhance Pandora’s advertising targeting segments with additional data. In its programmatic advertising business, Sirius XM Holdings uses common identifiers for several important functions, such as targeting and bidding. Sirius XM Holdings also uses common device identifiers to evaluate the success of its Pandora brand consumer marketing campaigns.

Apple, as well as mobile operating system and browser providers, have implemented product features and plans that may adversely impact Sirius XM Holdings’ ability to use these common identifiers and data collected in connection with these common identifiers in its Pandora business.

If Sirius XM Holdings fails to accurately predict and play music, comedy or other content that its Pandora listeners enjoy, it may fail to retain existing and attract new listeners.

A key differentiating factor between the Pandora service and other music content providers is its ability to predict music that its listeners will enjoy. The effectiveness of Sirius XM Holdings’ personalized playlist generating system depends, in part, on its ability to gather and effectively analyze large amounts of listener data and feedback. Sirius XM Holdings may not continue to be successful in enticing listeners to its Pandora service to give a thumbs-up or thumbs-down to enough songs to effectively predict and select new and existing songs. In addition, Sirius XM Holdings’ ability to offer listeners songs that they have not previously heard and impart a sense of discovery depends on its ability to acquire and appropriately categorize additional tracks that will appeal to its listeners’ diverse and changing tastes. Many of Sirius XM Holdings’ competitors currently have larger music and content catalogs than it offers and they may be more effective in providing their listeners with an appealing listener experience.

Sirius XM Holdings also provides comedy and podcast content on its Pandora service, and it tries to predict what its listeners will enjoy using technology similar to the technology that it uses to generate personalized playlists for music. The risks that apply to Sirius XM Holdings’ ability to satisfy its listeners’ musical tastes apply to comedy, podcasts and other content to an even greater extent, particularly since Sirius XM Holdings does not yet have as large a data set on listener preferences for comedy, podcasts and other content, and have a smaller catalog of such content as compared to music.

Sirius XM Holdings’ ability to predict and select music, comedy, podcasts and other content that its listeners enjoy is important to the perceived value of its Pandora service to consumers and the failure to make accurate predictions would adversely affect its ability to attract and retain subscribers and listeners, increase listener hours and sell advertising.

 

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Privacy and data security laws and regulations may hinder Sirius XM Holdings’ ability to market its services, sell advertising and impose legal liabilities.

Sirius XM Holdings receives a substantial amount of personal data on purchasers and lessees of new and used vehicles from third parties. Sirius XM Holdings uses this personal data to market its services. Sirius XM Holdings collects and uses demographic, service usage, purchase history and other information, including location information, from and about its listeners through the internet. Further, Sirius XM Holdings and third parties use tracking technologies, including “cookies” and related technologies, to help it manage and track its listeners’ interactions with its services and deliver relevant advertising.

Various federal and state laws and regulations, as well as the laws of foreign jurisdictions, govern the collection, use, retention, sharing and security of the personal data Sirius XM Holdings receives. Privacy groups and government authorities have increasingly scrutinized the ways in which companies collect and share personal data, including linking personal identities and data associated with particular users or devices with data collected through the internet, and Sirius XM Holdings expects such scrutiny to increase. Alleged violations of laws and regulations relating to privacy and personal data may expose Sirius XM Holdings to potential liability, may require Sirius XM Holdings to expend significant resources in responding to and defending such allegations and claims and could in the future result in negative publicity and a loss of confidence in Sirius XM Holdings by its subscribers, listeners, advertisers and other third parties with whom it does business.