FWONA

Analyst Note: FWONA (Formula One Group)

Date: 2026-06-20 Subject: Structural Setup Analysis & Business Fundamentals

1. Structural Readiness

State: Forming Current Price: $84.08 Extension: — Conservative Entry: — (Breakout not yet fired) Aggressive Entry: $84.14 (Pre-breakout / Forming entry) Breakout Level: $99.52 (Resistance to clear)

Classification: The setup is classified as FORMING.

2. Thesis Layer

Thesis Classification: TACTICAL / SETUP-LED Secular Thesis: None named at this date.

As of June 20, 2026, there is no named macro or secular thesis driving this specific setup. The investment case is strictly setup-led, relying on the structural quality of the coil formation and the immediate business fundamentals disclosed in recent filings. We must judge this name on the strength of the technical structure (the coil) and the operational health of the business as reported by management, without inventing a broader narrative. The conviction stack relies on the probability of the forming coil resolving to the upside (69% historical rate) combined with the underlying business stability.

3. Business Fundamentals

Company Overview: Liberty Media Corporation (FWONA) is primarily engaged in the motorsport and live entertainment industries. Its operations are headquartered in the United Kingdom and Spain, with events held worldwide. The core asset is Formula 1, a wholly-owned subsidiary and reportable segment that holds exclusive commercial rights with the FIA for the Formula 1 World Championship.

Business Model & Revenue Drivers:

• Race Promotion: This segment is a significant revenue driver, comprising 29.3% of Formula 1's total revenue for the year ended December 31, 2025.
• Media Rights: The company has secured a long-term media partnership with Apple in the U.S.
• Sponsorship & Licensing: The business model relies on the global appeal of the championship, with 2025 data showing hundreds of millions of TV viewers across 200 territories.

Recent Operational Context (Source: Earnings Transcript, 2026-05-07):

• Geopolitical Impact: Management reported a difficult decision to cancel the Bahrain and Saudi Arabian Grands Prix in April 2026 due to the situation in the Middle East. Consequently, the second quarter was the most impacted, with only five races expected to be held in Q2 versus nine in the prior year.
• Full Year Outlook: Despite the Q2 disruption, management expects an average of roughly 200 basis points improvement in leverage for the full year, consistent with the trend seen over the past four years.
• U.S. Market Growth: Apple's first season as the exclusive U.S. media rights partner is underway. The U.S. Grand Prix broadcast on FOX averaged 500,000 viewers, an increase over the previous year and the last broadcast in 2023.
• Global Engagement: The first four races of the 2026 season sold out. Social media engagement is up year-over-year. Early TV data indicates growing audiences worldwide, with the Brazil Sprint and Grand Prix surpassing 1.6 million viewers on average.

Strategic Stability:

• Concorde Agreement: In 2025, Formula 1, the FIA, and the Teams entered into the 2026 Concorde Agreement, securing team participation through the 2030 season.
• MotoGP Stability: Similarly, the 2022 IRTA Agreement secured MotoGP team participation through December 31, 2026.
• Corporate Structure: On December 15, 2025, the Company completed the split-off of its wholly owned subsidiary, Liberty Live Holdings, streamlining the corporate structure.

4. Archetype and Conviction

Archetype: Cyclical Recovery / Defensive Operator The company fits the profile of a Defensive Operator with Cyclical Recovery characteristics.

• Defensive: The business possesses high barriers to entry (exclusive FIA rights), long-term contracts (Concorde Agreement through 2030), and a diversified global footprint. The "sold out" status of early races and growing media engagement suggest resilient demand.
• Cyclical Recovery: The business is currently navigating a specific cyclical headwind (geopolitical cancellations in the Middle East affecting Q2), but management guidance indicates a path to leverage improvement and continued growth in key markets (U.S. media rights).

Conviction Stack:

• Thesis Strength: Low (No named macro thesis; purely tactical).
• Evidence Quality: High. Recent earnings transcripts (May 2026) and SEC filings (Feb 2026) provide granular data on race attendance, media viewership, and revenue composition.
• Setup Readiness: Partial. The price is holding above the invalidation line ($81.16), but the breakout level ($99.52) remains untested.
• Rerating Potential: Dependent on the resolution of the geopolitical situation and the successful integration of the Apple media deal. The leverage improvement guidance (200 bps) supports a potential multiple expansion if the full-year race calendar stabilizes.

Valuation Context: While specific valuation multiples are not provided in the evidence block, the management's explicit guidance on leverage improvement (200 bps) suggests a focus on balance sheet health, which typically supports valuation stability or expansion in the absence of debt overhang.

5. Invalidations, Strengths, and Gaps

What Would Invalidate the Case:

• Fundamental: A significant deterioration in the full-year race calendar beyond the Q2 impact, or a failure to achieve the stated leverage improvement.

What Would Strengthen the Case:

• Technical: A decisive close above the breakout level of $99.52, confirming the coil breakout.
• Fundamental: Confirmation that the U.S. media rights deal with Apple continues to drive subscriber growth and that the remaining races in the 2026 calendar sell out at the same rate as the first four.

Gaps in Evidence:

• Full-Year Financials: The evidence provided is primarily from Q1/Q2 2026 transcripts and 2025 annual filings. There is no specific evidence regarding the *actual* full-year 2026 revenue or EBITDA results as of June 20, 2026, only management's *expectations* for leverage.
• Geopolitical Resolution: There is no evidence on the specific timeline for the resumption of the canceled Bahrain and Saudi races, which impacts the full-year revenue realization.

PRIVATE ANALYST CALL

Judgment: Speculative Confidence: medium Key risks: Geopolitical cancellations impacting Q2 and full-year revenue; Technical setup remains unconfirmed (breakout at $99.52 not fired); Historical 69% breakout rate is partial readiness, not a guarantee. Sizing hint: Position size should reflect the "forming" nature of the setup; smaller than a confirmed breakout position, sized to the ATR of 2.8%. Expected path: Management expects leverage improvement and continued audience growth; technical structure requires a move above $99.52 to confirm the bullish thesis. Expected horizon: 3 to 6 months for the coil structure to resolve (breakout or invalidation). Failure mode to watch: A daily close below $81.16, which would invalidate the forming coil and signal a breakdown in the structural support.