Sirius XM Holdings, Inc. (NASDAQ:SIRI) 29th Annual Goldman Sachs Communacopia Conference September 15, 2020 8:50 AM ET

Company Participants

Jim Meyer – Chief Executive Officer

Conference Call Participants

Stephen Laszczyk – Goldman Sachs

Stephen Laszczyk

Okay, good morning, and thanks everyone for joining us today. My name is Steve Laszczyk and I work on the U.S. Telecom and Media equity research team here at Goldman Sachs. We are very excited to welcome back to Communacopia this year Jim Meyer, who is now outgoing CEO of Sirius XM. Jim, thanks for joining us in an exciting morning for what you do on the Sirius XM team.

Jim Meyer

Well, Steve, it’s great to be here and thank you.

Stephen Laszczyk

Alright, great. So, I wanted to start off with the announcement this morning. Jim, you are retiring in as CEO of Sirius XM, but still staying on Vice Chairman of the Board and Jennifer Witz, President of Sales and Marketing and Operations is taking over as CEO. So my first question for you, why retire now? And why are you and the Board confident that Jennifer as a Vice President to take over at such a transitional time for the business?

Jim Meyer

So, I’ve been with Sirius for almost 17 years. I’ve been CEO for pretty close to eight years. I have thought about retirement. I’ll be 66 years old in a couple weeks and don’t believe the mandatory retirement, but I do believe when the day comes you are not ready to give 250%, you really should let somebody else move forward. I love this company. I love the people of this company. But I just want to slow down a little bit and I’ve been talking with Greg, our Chairman, Greg Maffei, our Chairman about that for a while.

Obviously, when the pandemic hit and then, also of course the issues we’ve got with culturally, with social injustice are front in center for us. Stability was most important. I think we’ve done, as a company a really good job maneuvering through that. I think we’ve never been in a stronger position. And so, I’ve gone to the Board and to Greg and said, I think this is a good time for me to step down.

The Board ran a rigorous process, because I gave them plenty of notice of what my intentions were. And they examined both internal and external candidates. We have a really strong management team at Sirius XM. I am thrilled that Jennifer came to the forefront and the Board has selected Jennifer to be the next CEO of the company. I’ve worked with Jennifer for the entire time.

I’ve been at Sirius XM. I’ve promoted Jennifer numerous times and every position I’ve ever given her, she has just done terrific at. She is ready and she’ll do a great job.

Stephen Laszczyk

Thanks for that. You also announced that David Frear would be leading as well and that Sean Sullivan would be joining as CFO. What qualities were you looking for in the search for a CFO? And why is Sean the right person to that position?

Jim Meyer

Sure, before I comment, I just want to be clear. There is nothing wrong with the company’s books and records. David is an individual with a highest integrity. And this isn’t about a disagreement of any of those kind of things in the company. But with Jennifer’s promotion, I felt it was a natural time for David to pursue other opportunities that he has talked about.

I want to be clear, David and I’ve worked together for 17 years. I have the highest regard for David. I want to thank David for what he has done for me and more importantly, what he has done for Sirius XM. I wish him nothing but the best and I know he’ll do very, very well going forward.

With Sean, what – and we also ran a pretty extensive process there. With Sean, we got – we are really excited to have him join us. But we thought it was important, first of all we get someone of very high integrity and Sean checks that box everywhere he go. Number two, he is a seasoned CFO, which was also very important.

And then finally, he comes from the media business, which we think is great. And so, he comes to us with a highest of integrity, highly recommended and a great experience base. And I think he’ll bring a little fresh air into the building, not a hurricane, but a little bit of fresh air. And I always think fresh air is good.

Stephen Laszczyk

So, you mentioned the fresh air and I think naturally with management changes at a company is such as this one investors would typically ask what’s the strategic direction of the company going forward. How is that changing at all. My question for you is, what do you expect the main priorities within management with the – over the next few years and sort of what are the biggest opportunities for them to drive growth and how do you expect them to execute on that plan?

Jim Meyer

Well, I think – it’s a great question, and I think you have to think of it kind of a couple of different pieces. If you look at our business on this, so, number one, let’s be clear. We are in the audio entertainment business in North America. That’s what we define as our boundary.

Now, we wander out of that occasionally for what I would call, smaller initiatives like our position in the connected vehicle space, but one of the reasons we are in that business is, because the OEMs ask us to be in that business and it complements our OEM relationship that’s so valuable to us in our core audio business, okay?

But, our core business is audio entertainment. Our core market is North America and we are the leader in North America. As I look at the business, I see two main drivers to it. I see one, that we’ve just done a terrific job and then that’s our subscription business. When I joined Sirius, we literally had 40,000 subscribers and I am proud to say, we now have over 34 million subscribers, right?

And we also have a very robust subscriber business that is primarily driven by acquisition engines through car sales. As you look at that, there is lots of opportunity for that business to continue to grow. And we’ve grown self-pay subscribers by almost – by 1 million a year I think for ten years in a row. We are not there this year as most recent guidance is 700,000.

But I got to tell you, in a year like this, 700,000 feels a lot tougher than 1 million and I am really proud of how our team is performing and how we are doing there. I think though within that, we’ve learned that we can also both improve our churn and drive more growth through our streaming initiatives of Sirius XM. And we are only just getting started there and I think there is a lot more opportunity for us to continue to improve there.

The second leg of our stool, which is we are in the – in my opinion, in the first or second innings still is, if you look at the North American audio entertainment business, the vast majority of it is driven by free with terrestrial radio, by far being the biggest. I think there is still big opportunity for share shift between terrestrial radio and free streaming opportunities.

That is at its core as why we bought Pandora, but most importantly, the reason I wanted to buy Pandora was also to build, prior to our acquisition of Pandora, we had a very small advertising business. And now, we are, I think the leader. I know we are the leader in digital audio advertising in North America and we are building around that business with new tools and investing in it to drive it forward.

I think this business has a lot of room for growth and opportunity both in our traditional, and by that I mean, a shift of listening over to something that we can monetize and by being able to take those same ecosystem and provide those services in an off platform way like we are doing with SoundCloud right now. So, I am pretty excited about our growth opportunities.

Stephen Laszczyk

Let’s expand on that advertising point a little bit more. And you mentioned, you’ve been pretty acquisitive within the ad tech space and then also in the ad supported content side of things as well and/or a year-and-a-half, as was Stitcher, Simplecast, the investment in SoundCloud, how do all these pieces fit together? And what’s the opportunity you are going after both the on platforms and you mentioned the off platform piece as well?

Jim Meyer

And again, I stay focused on what’s our core objective and our core objectives is to be leader in audio entertainment in North America. And to do that, it’s really clear to me, you have to participate both in the subscription business and the free business. And all by the way I think the free business also is – can be a pretty robust funnel for the subscription business, right?

So, when you get into that and as we continue to develop it, one of the things that we knew when did our diligence on Pandora and has panned out to be really, really true is that Pandora had a very strong ad – digital ad selling capability. And that’s proven to be absolutely true. But it’s one that hadn’t been invested in the option for a lot of good reasons, in terms of priority and we moved it way up the list in terms of priority. And so, we are investing in that business to strengthen it and give it all it needs and we are pretty close.

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One of the reasons why I am really excited about when the Stitcher acquisition closed is, Stitcher has a very dedicated through Midroll a very dedicated ad sales force to podcast that just a natural fit into just another tool in the bag for our digital audio sales force in a natural synergy that will make our ad selling capability even more powerful. So, this is clearly an area we want to invest in.

Obviously, size of audience matters. But there is a big off platform opportunity that we – I won’t say recently, but I will say in the last nine to twelve months that we become pretty excited about and we are a company that sets its sides on something, plans its strategy and then, very methodically goes at it and executes, I think extremely well.

And so, I think you are going to see us continue to drive in the ad business. Steven, one other point I want to make is, we do have these generational questions, right, about, well, I have three kids and two grand kids well. I am positive they’ll enjoy audio entertainment, but it’s really difficult to say, ten years from now, twenty years from now, how will that be monetized, okay, and it’s got to be monetized or it can’t survive.

I am really sure that the two primary ways it’s going to be monetized are either subscription or advertising. We are a much different company today and that we are the leader in North America in both of those and I am really, really proud of that.

Stephen Laszczyk

Got it. And I think you generated $1.3 billion in advertising revenue or you did in 2019 as around 16% or 17% of total revenues. How big of a opportunity you see as being pursued over the next five or even ten years? Is it something that could double, triple, grow the sizable part of the revenue?

Jim Meyer

Yes. I’ve kind of talk to our team about, a goal over the next five years, certainly to get it to $2 billion, okay? And, as we understand the off platform opportunity, I think we’ll be able to better answer that number. We are just really beginning to understand all the pieces to it and what are some of our good opportunities to drive it.

But I can tell you, not everybody can afford the investment to build the ecosystem it takes to be a leader in digital audio advertising and we recognize that. And we intend to not only nurture our own position, but make that position available to others where including competitors, okay, where – but where we can also monetize that skill that we put in place.

Stephen Laszczyk

Got it. You mentioned podcasting is a component of the ad strategy with the Stitcher acquisition. I am curious, few questions here. What expense you most to build the podcasting opportunity going forward and how does your strategy maybe differ from what we are seeing from some of your competitors in the audio space?

Jim Meyer

So, I am really excited about podcasting going forward, but I just – I want to first, I think deal with what I think is a misnomer and that is, there are some people who follow the audio entertainment space who think this is a zero sum game meaning, one piece of content goes here then it’s not going to go here and that’s going to be the end and all that. That’s not the way it’s going to work.

We frankly – podcasting is in the first or second inning right now, again. And all by the way, there is way more content out there now than anybody can ever listen to. And so, the content is a really important part of the story, but also effectively marketing it and making it easy, easy to use for the end-user. It’s going to be critical here.

And most of the big brands are just beginning to play, most of the big media brands are just beginning to play and get interested in the media space. Our relationship with Marvel is a great example. That’s a company that’s made a fabulously successful path on video who is now saying, hey, wait a minute. I see an emerging form of entertainment in audio and we want our brand to play in it and we want you to help us evangelize that and drive that across most of the platforms.

And I think you are going to see a lot of that. I think what’s most exciting about podcasting for me is, a course taking existing spoken word shows and breaking them up and making them easier to search and to listen to and make it more convenient is really, really important. But, what I am really excited about is the amount of effort that’s going into develop new content.

Content that we’ve not seen and I think we all were enticed by what happened with serials. And I think now, when you look at a lot of the big name titles that are out there in podcasting today, I think there is a real opportunity for content to come to the forefront. And believe me, Steven, I’ll put our content team up against anybody.

We’ve proven over the last 17 years that we are as good, in fact, we are better, I believe than anybody else in the audio entertainment business at building content and developing content. And so, I think the opportunity for new exciting content that the consumers never really touched on before is going to come through podcasting.

And I think it’s got a real opportunity to expand the whole audio entertainment pike, not just some kind of a share shift.

Stephen Laszczyk

Got it. And you mentioned putting your content team up against most others. One of your content that you’ve been very successful in over the last decade is in sports and news and it’s been a pretty big differentiator for your platform.

Two questions here. Maybe looking forward, given all the focus on podcasting Alan – and buy content to your audio, is exclusivity necessary in order for this type of content to be valuable to you and then market it to subscribers?

Jim Meyer

Well, exclusivity is always nice, okay. But exclusivity also comes with a set of economics that have to be proven. I can tell you that we understand the economics very, very well. For instance, of a content like Howard Stern and I can look every investor in the eye and tell them that is a good investment for Sirius XM. That’s not true with – there is just not that many pieces of content out there like that, okay, that it’s that – that apparent too.

And so, you have to be really careful with that. And then, there are many, many content holders who want to be available on multiple platforms and I don’t blame them, okay. And for instance, if you look at the music industry, there really is not. There is nothing that in itself is exclusive. We’ve been able to build brands within the music business that are exclusive like the highway, like Sirius Hits 1.

And then, supplement that also with what we think is really unique on our talent to make out a truly compelling opportunity. I think live is really important, Steven. I think it’s being all we looked, because I think we are the leader in it although terrestrial radio is pretty damn good at it too, right. And I think, to be a leader in the audio entertainment business, obviously you need music and you need to that very, very well.

But I think you need live news and live sports and then you need, what comes from live news and live sports and whatever format that maybe, whether it’s linear shows or whether it’s on-demand/podcasting. And then, you need to participate as well in entertainment and all the other things that are really finding coming to the forefronts with true crime for instance right now.

If you look at podcasting, one of the most popular version is out there. And so, I think live is really, really critical. We understand it. We understand the sports rights business very well. But to be honestly – if you look at the sports leagues, they’ve done a really, really – I admire them, because they’ve done a really effective job of kind of dividing up what I call beachfront property in that.

The NFL is in available many, many places. The NBA is available in many, many places. MLB NHL are available in many, many places, and by that, I mean, they are available on a given Sunday on your mobile devices. They are available on Sirius and they are available on terrestrial radio. I just don’t see that changing over the next several years.

But I want to emphasize again. I think our position is live is a really core asset for us and it’s one we intend to build on. One of the places we are investing is we are completely rebuilding the Pandora App and we’ll have – Jennifer will have more to say about that early next year and as we go into 2022. But I can tell you , we will bring live capability to the Pandora product offering.

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Stephen Laszczyk

Got it. So, it sounds like you have a lot of ambitions on the programming front. Maybe bringing some streaming capabilities in Pandora, doubling down on live sports and news, expanding on podcasting, let me just ask this, you spent $460 million on programming and content cost last year, it’s about 6% of revenue. How much money does Sirius need to spend to execute on its content strategy going forward? And can investors expect the programming and content cost line item to be as much of a source of operating leverage in the future as it has in the past?

Jim Meyer

So, just for a point of clarity, and then I am going to answer your question. It’s a good one, is, don’t forget, we also spend $1.7 or something on music royalty. So, we spend a lot more than $460 million on content.

We just keep it in two different line items, right. We pay content holders up in the – music up in the royalty line and then spoken where we pay it mostly down in programming and then, that’s also includes the money for all on air talent across our various channels.

I think our programming cost have risen kind of as a percent of revenue flat to a tiny bit up. That’s been very deliberate and I think it’s reasonable to say, that’s what I continue seeing. That said, I will tell you, if we see compelling content, and by that, I mean, Scott Greenstein and his team and they bring me, I can tell you, Scott’s team brings me opportunities daily and weekly.

And as Scott and now Jennifer but – become convinced that there are the piece of content that can significantly drive either our retention or our acquisition, we will go get it and we will wait for that content then to pay off down the road, because, our content as a percent of revenue obviously has and always been the number you just quoted. It’s quite a bit higher if you go back ten years ago.

And so, I really think we are very disciplined here. But we are going to be, at least, we believe we are the leader in content in North American audio and in audio entertainment and I would say the reason why that possibly would change.

Stephen Laszczyk

Got it. Thanks for that.

Jim Meyer

But responsibly, okay.

Stephen Laszczyk

Got it. I wanted to switch gears for a moment and talk about your satellite business. Last week, you increased your guidance for 2020, so pay net adds from approximately 500,000 to approximately 700,000. What trends are you seeing in the business? And then, what gave you confidence to increase the outlook when you did it?

Jim Meyer

So, I’ll be honestly, I am really surprised with where we are when COVID hit and we were through our guidance, it was really and frankly we didn’t what to expect. And I think what it shows is frankly, how strong the demand for our product is and most importantly how loyal our customers to what we provide them.

And so, what gives us the confidence I think it’s three things. One, we are just seeing really strong performance from our subscribers and churn to where our churn has just really, really behaved well, particularly our non-pay churn is. I am really, really proud of how it’s behaved and what our team is been able to do in that area.

I’ll also tell you that we’ve seen a resurgence in our win back business, meaning our marketing efforts out there to the more than 100 million dormant radios that are factory installed, that aren’t active out there now or whatever that – I got the math a little confused, but it’s a big number, okay, 80 million, 90 million. And well, we’ve seen good success also in the last three or four months and an uptick there.

And then finally, it just seems like every week, the automotive business is getting better. We are very close to the automotive OEMs and I am also what we are close to the biggest automotive retailers and so, we get very clear feedback from them on what’s happening with automotive sales. And it’s a good story. It’s not back to where it was, but it’s steadily improving.

Frankly, the near-term right now, the biggest issue is there is just not enough eventually in the system and particularly in certain cases like German brand luxury cars are very low in terms of inventory right now.

That will fix itself. It always does and it will fix itself although the next several weeks, but I am pretty bullish on what we see in automotive sales and so when you combine all those together, it gives us the confidence to raise our guidance and I am highly confident that we’ll achieve that 700,000.

Stephen Laszczyk

You mentioned that the pause, I think the OEM production and the low inventories, is there a specific quarter that investors should expect that to particularly hit yourself in net adds, is it a 3Q story, 4Q story? And sort of being somewhat you are seeing today, when would you expect maybe some of the trial funnel trends to normalize?

Jim Meyer

It’s primarily for us the 3Q story and I think the fact that we increased our guidance half way through the third quarter should give you a little indication of how we see things right now.

Stephen Laszczyk

Got it. You mentioned on churns, you are doing a really good job managing churn through this…

Jim Meyer

Stephen, I want to make one point, I want to make – just to make sure I am clear, because of the length of the automotive trials, some of them are 12 months, some of them are six months, some of them are three months, it takes a long time for that change to work its way through. So, I don’t want to say the only impact is in the third quarter, but the biggest impact. We’ve already – it’s already on us and starting to be behind us.

Stephen Laszczyk

Is it fair to say that, maybe for the next three or four quarters as well, we are working through this inventory issue with the OEMs?

Jim Meyer

I think for the next one or two.

Stephen Laszczyk

Thanks for that. And then, just on churn, you mentioned that’s been – is there anything you are doing differently on churn? Is it tactical? Is it blocking and tackling as you often say or is it maybe being a little more aggressive on the save rates and promotions given maybe people are driving lesser or their habits have changed over the last couple of months?

Jim Meyer

Well, it’s – I can tell you, it is hard work and it’s methodical work. And our team – I couldn’t be more proud of our team and what they accomplish, because there is just no – I wish, there was one lever and to just go boom, it makes it better, but it is a ton of things and it is a ton of testing and a ton of recalibrating and slowly just continuing to work your way through what works.

But I will tell you one thing we’ve learned. We have learned, and by the way, you almost want to go dot, right. But one thing we’ve learned, we have a really strong position in the automobile and people love our product in the automobile. We have traditionally had less of a strong position outside the car. And we began, several years, three four five years ago, to make significant investment in our streaming offering.

We’ve up the any virtually every year to where we now include streaming in almost all of our subscription packages at no charge. And why do we do that? One of the things that we’ve absolutely learned is that more people listen the less they churn. The more they are engaged, the less they churn and so, the more we can get them to listen in the car, but outside the car, the stronger our churn profile will be going forward.

And I think one of the things that we’ve seen in the pandemic is, obviously, we’ve seen what I believe will be mostly a temporary downturn in miles driven and as more and more people in the near-term and mid-term are working from home including our own company, okay. But we’ve seen a real escalation in listening through our streaming stuff on a variety of mobile devices.

I think what strong point we got for going forward for us is, I think that listening will continue and I think the listening in the car will go back to its normal levels. And so, I think that, that’s a good indication of where things should go, where things could go forward. As you also know, we entice customers come back with a variety of pricing opportunities and pricing proposals, we’ve gotten really good at managing those.

But I will tell you and I know our churn team is probably listening this call, we can do better. And I think we can do better both in how we manage our churn and how we monetize our subscriber base within that trade off of revenue versus sub growth.

Stephen Laszczyk

So I am trying – it’s averaged about 1.7% over the last three years. So, is there any reason it couldn’t return back below that level on a sustained basis? I know you targeted 1.8% to 2% over the long run, but especially the economy improves and what we’ve seen so far over the last two or three quarters…

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Jim Meyer

So, I think it’s fair to say, me, okay. I think investors should probably think more of our churn in the 1.7%, 1.8% range instead of the 1.8%, 2.0% range with one caveat and that is, we really believe in the power of the automotive fleet and the turnover of that fleet as to how many acquisition opportunities it gives us. And as you know, one of the biggest drivers of our “churn” is turnover of vehicles is they are sold from one owner to another.

That’s something we’ve got really, really good at predicting. It is the biggest – single biggest part standalone of our churn and obviously, that’s going to continue to get bigger and bigger as our used car fleet gets bigger and bigger and as we move towards 200 million or more satellite enabled – satellite radio-enabled vehicles.

So, that’s what I think and that’s where I am confident it’s settled in. I will tell you, I am not going to guide there and I am not going to tell you and I think that it’s the way you should plan your models. But I am certainly going to push our team and I know Jennifer will because Jennifer runs it today, okay, to keep incrementally trying to do better and better there.

So, I am really pleased with where we are right now and I don’t see any near-term reason why we can’t continue that.

Stephen Laszczyk

Great. Switching to ARPU. Sirius has historically had a very healthy degree of pricing power. I think over the last five years, you’ve grown subscriber ARPU at an annualized rate of something like 2% per year. If investors expect a similar degree of ARPU growth going forward, you mentioned, you are adding streaming, you are adding a lot of different content of podcasting, maybe some more to come on the sports and the news front. Did this give you enough firepower to keep raising ARPU at a similar rate?

Jim Meyer

So, I think we’ve done a great job and I’ll put our track record there again up against anybody’s. And I don’t see why that’s not a good model to kind of use going forward. I will tell you, you have to – one of the things that I preach to our organization is, we are in our customers’ business every day and the minute you get arrogant about it is the minute you are going to lose it.

Okay, and so, you just can’t put through arrogantly put through price increases. They have to be thought through. They have to be done very well and they certainly worked more effectively when the customer feels like he is getting something you have to say, here is she is getting something at the same time and we’ve been really successful with that going backward and your math is a 100% correct as to what it yields in terms of the 2%.

I don’t see any reason why we won’t continue with that strategy going forward. I’ll also point out that and I mentioned in the churn, we do wrestle a lot with managing pricing that’s driven to drive acquisition versus pricing for a longer term and what subscribers should pay.

And then, and we are very, very careful to try to identify what we might refer to as a spinner or a gamer which is someone that will come in and out of our system simply to take advantage of what’s meant to be an acquisition opportunity as opposed to a – those prices were never meant to be permanent discounts to our pricing base.

We are getting better and better at managing that. I’ve seen some really good tools that the team is working with. And I think we’ll continue to work. It’s hard work. And I feel like there is a little opportunity there, as well. So, I think what you stayed at going backwards is a good way to look at the business going forward.

Stephen Laszczyk

Thanks for that. Just to finish up here last five minutes, moving to leveraging capital allocation and discussion and wrap it off.

Jim Meyer


Stephen Laszczyk

SIRI has run leverage pretty consistently around three turns net debt to adjusted EBITDA for the last five years or so now, which is about a four turn below what you targeted which is four times. How do you think about what the optimal leverage is for the company going forward?

And has the durability you’ve seen in the business model through COVID changed your thinking on that at all? Could you guys potentially be a little bit more aggressive on leverage going forward?

Jim Meyer

Well, so, first of all, I think you should expect that our target of three or four times, okay, I mean, that we’ve historically been at. I don’t see any reason why that won’t continue. I also say that, the beauty of our business model and the beauty of our financial results is we can comfortably absorb four times leverage with very little – with very little strain to our balance sheet or our economics.

That in itself though is not just the reason to drive to four times. Okay, we – I – we think we’ve been very disciplined about our leverage rate only if we see opportunities to drive our business going forward, either through growth and really, we are all going to be clear on, we run the business and sometimes there is a little confusion here. We run the business at the end of the day for free cash flow per share.

That’s the way we run the business. And so, every opportunity we examine, we look at through that lens. And I think it’s worked well for us. I think it will continue to work well for us going forward. So, I don’t see any reason in the – to change the target. I don’t see any reason that we have a change in our behavior. We certainly – if a good opportunity came along, it could easily lever up to four times.

And I wouldn’t be uncomfortable. I know our Board – we’ve taken them through this many, many times as not uncomfortable with that, but we would only do it if there is a really, really good reason to do it.

Stephen Laszczyk

Understood. And then, just last question from me last set of questions, one of the top questions we get from investors and I am sure you get to some extent to is, is as it relates to Liberty’s 73% ownership stake in the company what that means for capital allocation? You have the 80% and 90% ownership thresholds and they are often talked about – I was wondering if you could just start by touching on what the significance of the 80% ownership threshold means? And what this is going to mean for the way you are in the company?

Jim Meyer

Well, the number one I want to tell you, our – we have a really – I think, really savvy and very experienced Board of Directors including strong independent directors. We talk about let 80% and 90% mean a lot, but 70% which really didn’t mean anything, okay. And we have outside advisors advising the Board and management independent Liberty of what those thanks me.

I think most investors understand for Liberty, for instance, if they cross the 80% threshold, it does provide – it does make dividends more and more economically efficient for them. I – okay, I don’t – I’ve certainly not seen – so, let me say. Well, how do I answer is, number one, I don’t see any change today in our capital return policy that I think has been so successful for us over my eight years here while we returned $10 billion of capital to shareholders.

I think we continue to believe our stock is a good use of that capital after of course we’ve looked at internal opportunities and acquisition opportunities. We also believe in the dividend. It’s why we implemented it several years ago.

And I think we’ll just – we’ll kind of evolve and as we approach 80% which would be natural if Liberty continues to not participate in the buyback which they haven’t mostly over the last several years and accrete their ownership.

I think our Board is very skilled on what that means and you can – investors should be confident that we understand it and we’ll take it under – we’ll watch it closely.

Stephen Laszczyk

What happens with the 90% threshold?

Jim Meyer

There are things that that we have been advised that 90% that things hold squeeze out and that our Boards have been very carefully skilled. And I think those are two very different, at least, I know those are two very different plateaus that need to be dealt with differently.

Stephen Laszczyk

Alright. Great. Jim, we’ll outbreak with there. We are just let out of time. Thanks for joining us today and thanks again and congratulations on your retirement and best of wishes going forward.

Jim Meyer

Thank you, Stephen. I – thanks for having me and number two, I couldn’t be more confident in the direction of the company going forward and I couldn’t be more confident in Jennifer’s ability to lead it. So, it’s a really great day for me. Thank you.

Stephen Laszczyk

Okay. Thank you.

Jim Meyer

Thank you.

Question-And-Answer Session

End of Q&A