Liberty Media Proposes to Split, Merge Stake with SiriusXM
By: Stuart E. Leblang, Michael J. Kliegman and Amy S. Elliott
Liberty Media Corporation (Liberty Media) announced1 September 26 that it is considering separating off its 83-percent2 stake in Sirius XM Holdings Inc. (NASDAQ: SIRI) (SiriusXM) via a newly formed SplitCo, redeeming out all holders of Liberty SiriusXM tracking stock (NASDAQ: LXSMA) (Liberty SiriusXM) in exchange for shares of SplitCo. SplitCo would then combine with SiriusXM to form New SiriusXM (at which point, public shareholders owning the remaining 17 percent of SiriusXM would receive shares in New SiriusXM along with some cash—$0.55 per share—tied to the amount of debt New SiriusXM would assume from Liberty Media in the transaction). While the press release is not explicit about this, we think they are likely expecting that SplitCo will become New SiriusXM. When the dust settles, holders of LXSMA and SIRI stock would now only hold shares of New SiriusXM.3
The proposed transaction will unwind one of the three tracking stocks that Liberty Media has in place. The other two tracking stocks—the Formula One group (tickers include NASDAQ: FIONA), which tracks Liberty Media’s wholly owned Formula 1 motorsports business subsidiary, and the Liberty Live group (tickers include NASDAQ: LLYVA), which tracks Liberty Media’s 30-percent interest in Live Nation Entertainment, Inc. (NYSE: LYV)—would not be impacted.
Liberty Media communicated the potential split-off and merger transaction to a special committee of independent (from Liberty Media) directors at SiriusXM, which responded4 that it is evaluating the proposal with the help of advisors. It is too early to determine the chances that the special committee might ultimately recommend the proposed transaction to SiriusXM’s Board of Directors. (In November 2021—when Liberty Media acquired enough shares of SiriusXM to cross the 80-percent control threshold5—SiriusXM and Liberty Media entered into an agreement such that Liberty Media would not effect any merger with SiriusXM without obtaining prior approval from such special committee.)
As part of the unwind, the current high/low/no voting structure6 embedded in the Liberty SiriusXM tracking stock will go away. Accordingly, SplitCo and its successor, New SiriusXM, will have only a single class of common stock. There was a period of time (between July 31, 2017 and April 17, 2023) when S&P Dow Jones Indices would not add companies with multiple share class structures to certain of its indices. Because of this more restrictive index eligibility rule, some companies had considered abandoning their multi-class stock structure. While this simplification transaction will facilitate New SiriusXM having a one-share, one-vote framework, such a feature is no longer a requirement for S&P index inclusion.
For each underlying share of SiriusXM stock held by SplitCo, 1.05 New SiriusXM shares will be distributed as merger consideration (whereas for each share of SiriusXM held by the public, only 1 share of New Sirius XM will be issued). This means that, as a result of the transaction, the aggregate ownership of SiriusXM (now New SiriusXM) by former Liberty SiriusXM tracking stock shareholders as compared to the public would actually increase slightly due to the small exchange ratio advantage for the tracking stock shareholders built into the proposal.
Presumably, the exchange ratio in the merger may be a focus for negotiation and approval of the transaction by the SiriusXM independent directors. Arguably, Liberty Media could justify a control premium for its shareholders because of its controlling interest in SiriusXM. But if that were the case, we would expect to see a greater benefit being claimed in the share breakdown. We could potentially see an opposing argument from SiriusXM that an unmerged SplitCo holding only SiriusXM stock would trade at a discount to SiriusXM stock, and this should be reflected in the exchange ratio. Time will tell whether the proposed exchange ratio will stick, but we think that there may be a tax reason behind Liberty Media’s suggestion that the SiriusXM shareholders suffer a small dilution in the merger, which is discussed below.
Back in 2014 (when Liberty Media owned only about 53 percent of SiriusXM and wanted to acquire the remaining SiriusXM stock in a stock-for-stock merger that never came to fruition7), Liberty Media CEO Greg Maffei said that “a roll-in of SiriusXM is attractive, both for Liberty and for the SiriusXM shareholders. Eliminates duplicity, eliminates two classes of stock . . . .”8 This time around, the justifications are the same: “Liberty’s proposal rationalizes the dual corporate structure between LSXM and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM,” Maffei said in a press release announcing the proposal.9 “SiriusXM minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion.”
Tax Implications and Risks of the Proposal
The transaction is structured as a Reverse Morris Trust (RMT), with a split-off of SplitCo followed by a prearranged merger with SiriusXM. The fact that there will be some cash distributed in the merger to holders of SiriusXM will not present a concern as to the split-off being a “device,” because the cash is not going to Liberty Media shareholders.10 Though an RMT transaction ordinarily involves a merger with an unrelated company, the same structural issues are presented where the spin or split transaction involves ownership in the merger partner. The so-called Anti-Morris Trust statute, Section 355(e) of the Internal Revenue Code, generally requires corporate level gain recognition where a Section 355 distribution occurs as part of a plan with another transaction (such as a merger) that results in shareholders in the distributing corporation not owning a majority of the stock of both the RemainCo and SpinCo (or SplitCo). Here, due to SplitCo’s large percentage ownership in the merger partner, SiriusXM, the resulting share ownership should keep the transaction on the “right side” of these rules.11
An essential question is whether ownership of a controlling interest in SiriusXM satisfies the active trade or business (ATB) requirement under Section 355. We addressed this issue in a report last April entitled “How Many ATBs Does Liberty Media Have,”12 which is attached to this report. In order for the proposed transaction to qualify under Section 355, Liberty Media and SplitCo must each be engaged in an active trade or business immediately after the distribution, and each of those ATBs must have either been carried on by Liberty Media for the previous five years or, if not held by Liberty Media throughout that period, must have been acquired by it in a transaction in which no gain or loss was recognized. Following the proposed split-off, Liberty Media will hold one ATB, Formula 1. Will SplitCo’s ownership of its 83-percent interest in SiriusXM qualify as an ATB? Generally, ownership of 80-percent control of a subsidiary engaged in an ATB will itself qualify as an ATB, but not if control was acquired during the five-year period “by reason of transactions” in which any gain or loss was recognized.13
Liberty Media has owned a majority of the stock of SiriusXM since 2013.14 As of December 31, 2018, Liberty Media’s ownership of SiriusXM had grown to approximately 73 percent, largely through share redemptions by SiriusXM.15 Additional redemptions by SiriusXM increased Liberty Media’s ownership to approximately 79 percent as of September 30, 2021.16 In November 2021, Liberty Media increased its ownership to 80.2 percent17 (achieving “control”18 for tax purposes) through an acquisition of SiriusXM shares owned by Berkshire Hathaway Inc. (NYSE: BRK.A) (Berkshire Hathaway) in a tax-free reorganization.19
Section 355(b)(2)(D) provides that control of a corporation with an ATB must not have been acquired directly or indirectly by the distributing corporation during the previous five years in a taxable transaction. The position of the Internal Revenue Service (IRS) is that if a subsidiary’s taxable redemptions of its stock cause a parent company to obtain 80-percent control, that is considered an acquisition of control by the parent in a series of taxable transactions.20 If Liberty Media’s ownership percentage had reached 80 percent as a result of further redemptions by SiriusXM, it is unlikely that the company would find it tenable to argue that this ownership position qualified as an ATB. While we have not seen an articulation of Liberty Media’s analysis of the ATB issue, we assume that the tax-free transaction with Berkshire Hathaway that put them over the 80 percent line is an essential part of it.21
In 2006, Section 355 was amended to apply the ATB rules by reference to affiliated groups of companies.22 Implementation of these so-called Separate Affiliated Group (SAG) changes has remained largely in the form of proposed regulations.23 It is possible that Liberty Media’s tax advisors have put together a technical argument that SplitCo can satisfy the ATB requirements despite the fact that the group’s ownership of an 80-percent interest in SiriusXM is based partly on redemptions within the past five years, based on a combination of the 2021 Berkshire Hathaway transaction and an argument that the authority on redemptions is not applicable under the post-2006 SAG regime.
It is also possible that the company’s tax advisors are thinking that the ATB position can be bolstered by the fact that there is a “pre-wired” merger between SplitCo and SiriusXM, which is itself the ultimate source of the ATB. Technically, the split-off and merger are separate transactions, and we think it would be unprecedented to test SplitCo’s ATB status by reference to the ATB of the subsequent merger partner.
Why Is There a SplitCo?
Stepping out of the tax technical realm, one should ask: Why isn’t Liberty Media simply proposing to distribute its SiriusXM stock directly to Liberty SiriusXM tracking stock holders in redemption of their tracking stock? This would presumably not require any merger or negotiation with SiriusXM’s independent directors and, in one fell swoop, would eliminate the SiriusXM discount. This would avoid the risk of having to concede more shares to the SiriusXM shareholders due to the discounted value of a SplitCo holding shares in SiriusXM.
We think there is a tax reason why Liberty Media is not simply distributing its SiriusXM stock. Section 355(a)(3)(B) provides that, in an otherwise qualified Section 355 distribution, stock in the controlled corporation (SpinCo or SplitCo) that was acquired during the previous five years in a taxable transaction is treated as taxable consideration.24 While we continue to see technical challenges for SplitCo holding only the 83-percent interest in SiriusXM to satisfy the ATB tests, a direct distribution of the SiriusXM stock presents a more stark problem—at a minimum, rendering a portion of the distributed stock taxable to the corporation and the shareholders, and at worst, more clearly disqualifying the transaction under Section 355.
Tax Reason for the Public Dilution
As promised, here is our guess as to why the proposed transaction reduces the SiriusXM public shareholders’ ownership in the merged company by just over 6 percent.25 Recall that the public SiriusXM shareholders will receive $0.55 per share in cash along with stock in New SiriusXM. That cash will be taxable “boot” in the reorganization, and, accordingly, the public SiriusXM shareholders will recognize gain (but not loss) in the merger that may be taxed as a dividend by applying the rules applicable to stock redemptions.26 Under the Clark test,27 a shareholder is viewed as if it first received all stock consideration and then redeemed enough of the stock of the acquiring corporation to receive the amount of cash in the transaction.
When considering a share redemption, we ordinarily look to see whether there is a sufficient percentage reduction to fit within the “safe harbor” of Section 302(b)(2), i.e., a greater-than-
20-percent reduction in the percentage of the company owned by the shareholder. When the reduction is less than that, one needs to conclude that there is a “meaningful reduction” in ownership of the company to fit within the “not essentially equivalent to a dividend” provision of Section 302(b)(1).28 Under the IRS’s published authority, any reduction in ownership will be “meaningful” when it involves a minority shareholder whose relative stock interest is minimal and who exercises no control over the affairs of the company.29
Technically, even in a 1:1 share exchange ratio, this would have the SiriusXM shareholders as a group initially viewed as receiving an increased percentage in New SiriusXM followed by a post-redemption percentage settling back to their pre-merger percentage (due to the cash consideration first being treated as the receipt of stock).30 Under this approach, SiriusXM shareholders should be viewed as reducing their percentage interest in the notional redemption. Nevertheless, it would not be an unreasonable concern to view a transaction where the “Target” shareholders are in fact maintaining the same percentage interest in the post-merger company that they had pre-merger as presenting some risk of dividend treatment. This could be all the more so where it is SiriusXM that is funding the cash consideration, rather than the acquiring corporation. Also, while the description of the transaction structure in the press release implies that SiriusXM will be acquired by a New SiriusXM, it is possible that SiriusXM could itself be the acquiring entity, in which case the cash distributed to the shareholders would be characterized not as boot in a reorganization, but as a straight redemption subject to Section 302. Thus, we suspect that Liberty Media may be proposing a small percentage reduction in order to head off any such concerns.
The ATB Issue Risk
Let’s return to the main issue of whether SplitCo satisfies the ATB requirement. We think there is merit in a view that the tax-free status of the 2021 Berkshire Hathaway transaction may qualify Liberty Media's ownership of SiriusXM as an ATB. We have previously expressed some skepticism about the technical strength of that approach, and it appears that the IRS declined to bless it in a ruling on the Braves split-off.31 Regarding the IRS not issuing a ruling on the SiriusXM stock as an ATB, it is worth noting that this could mean anything from a fairly strong contrary view to a sympathetic one that the IRS is just not comfortable endorsing in a ruling. Liberty Media’s tax advisors have the advantage of having spoken with the IRS about the merits of the issue, and this may bear on their level of comfort.
With all that said, it looks to us that there is a lower level of technical support on the ATB issue in this case than in most spin-off transactions. For many of you, the main question is whether this tax concern is likely to prevent the proposed transaction from being consummated.32 We think the answer to that question probably not. Clearly, the company and its tax advisors have considered the tax issues and associated costs and risks (which we discuss below) and have concluded that they want to move ahead. We will ultimately see from tax disclosure language in a proxy statement whether the tax advisors are at a “will” or a “should” opinion level on the ATB issue, and it seems clear they will not be getting a ruling from the IRS. As we will discuss further below, SiriusXM also gets a say in the matter, and assessment of tax risk and who bears it should be a consideration for the independent board members.
What would be the adverse tax consequences if the IRS were to challenge the tax-free qualification of the split-off due to its disagreement on the ATB issue? The one we usually worry about is that the distribution of the SplitCo stock would be taxable to the distributing corporation (Liberty Media). The company would recognize taxable gain (but not loss) on the excess of the fair market value of the SplitCo stock over its tax basis.
Disqualification of the split-off under Section 355 would also render it taxable to the participating Liberty Media shareholders. Because this is a split-off (a redemption) rather than a spin-off (pro rata distribution), the shareholders would generally recognize capital gain or loss based on the difference between the value of the SplitCo stock and their tax basis in the Liberty Media stock (the tracking stock) redeemed. There should not be withholding tax to foreign investors. For taxable domestic investors, any gain should be a timing matter. The IRS wouldn’t likely be enthusiastic about seeking tax adjustments from a large number of public investors.
Assuming there is some material amount of corporate tax that could be assessed if the split-off were challenged, whose “problem” would that be? This can be a thorny question in the case of a normal situation, but it is more challenging when there is a planned merger and further, when the distributing corporation only has tracking stock outstanding. Primary liability to the IRS falls on Liberty Media Corporation. Generally speaking, other members of the consolidated group—including SiriusXM itself—have secondary liability for the group’s tax liabilities.33
It is customary in spin-off transactions for the RemainCo and the SpinCo (here, SplitCo) to enter into a Tax Matters Agreement which, among other things, would indicate who bears contractual liability for taxes in the event that the spin-off goes bad. By default, primary liability is RemainCo’s, but SplitCo would be responsible if its actions caused the split-off to lose its tax-free status. Here, because of what will be a pre-negotiated merger with SiriusXM, issues of who is responsible for this contingent tax liability would become an important matter for SiriusXM’s management and independent board members. In this case, we would expect such an agreement to cover the ATB issue, since the source of any concern about the that issue involves facts now on the table rather than something that one or the other party might do in the future.
In fact, we have quite good information about who would bear the tax cost of a failed tax-free split-off from a Form S-4 that Liberty Media filed May 17, 2023 in connection with the Braves split-off. That document contains a summary of the tax sharing agreement34 entered into between Liberty Media and the Braves SplitCo and, separately, a summary of how various tax costs and benefits are to be allocated among the three remaining tracking stocks.35
Under the Braves tax sharing agreement, Liberty Media generally absorbs any tax costs resulting from the split-off not qualifying as a tax-free transaction. Braves SplitCo is responsible for these tax costs only if taxability results from its breach of a covenant in the agreement or from a post-split transaction involving the SplitCo triggering the Section 355(e) anti-Morris Trust rules. Any such tax costs that are borne by Liberty Media are allocated among the tracking stock groups in proportion to the relative market capitalizations of the tracking stocks.
Although, at the time of the Braves split, the Liberty SiriusXM group separation had not yet been proposed, the Form S-4 indicated that were Liberty Media to become responsible for tax costs associated with such a transaction, the entire amount of those taxes would generally be allocated to the Liberty Live group.36 However, if taxability of the transaction results from Liberty Media’s breach of covenants under a tax allocation agreement or as a result of a post-split transaction involving Liberty Media triggering a tax under Section 355(e), then the tax costs would be shared proportionately by the Liberty Live and Formula One groups.37
In our December 28, 2020 report “What Are Liberty Media’s Plans for Braves and SiriusXM,”38 we suggested a series of steps that Liberty Media could take to separate the SiriusXM investment and consolidate with SiriusXM, with what we thought was a technically strong position on the SiriusXM ATB. This was before they had reached the 80-percent threshold. It is more cumbersome than the RMT approach outlined in the recent news release, but we make note of it only to indicate that it is possible that when SiriusXM becomes involved in the transaction, the structure could change in a way that presents less tax risk than the current one. We think that an alternative step plan could potentially be eligible for a favorable IRS ruling.
Assuming the parties stick with the currently proposed structure, we think this transaction may be a good one for procuring tax risk insurance. For a transaction with a “should” level of opinion from one or more reputable tax advisors, paying a premium to remove any element of uncertainty about tax risks could make a lot of sense.
Required Shareholder Votes
Pursuant to Liberty Media’s charter, the split-off itself would be subject to approval by the Liberty SiriusXM tracking stock holders (voting together as a single class). In addition (but likely at the same time), the merger of SplitCo and SiriusXM into New SiriusXM would also need to be (independently) approved by both the SplitCo and the SiriusXM shareholders.
It is unclear whether the combination of SplitCo and SiriusXM into New SiriusXM would be subject to a non-waivable condition requiring the approval of a majority of the minority (non-Liberty Media) SiriusXM shareholders. While it doesn’t appear that such a majority-of-the-minority vote is required, it is possible that one might be provided in order to insulate the SiriusXM board from claims that the directors are not acting in the best interest of all shareholders. Note that back in 2014 when Liberty Media (which at the time owned some
53 percent of SiriusXM) proposed acquiring the remaining equity of SiriusXM that it did not already own (in a stock-for-stock merger, exchanging shares of new Liberty Media Series C common stock), a majority-of-the-minority vote would have been required.39
One or more authors may have positions in stocks referred to in this article. Akin may represent individuals or entities that may have positions in stocks referred to in this article.
Akin Gump Strauss Hauer & Feld LLP has a full tax team closely following developments in this area. Please feel free to contact any of them with any questions.
1 Press Release, Liberty Media, Liberty Media Corporation Proposes Combination with Sirius XM Holdings Inc. (Sept. 26, 2023), https://www.sec.gov/Archives/edgar/data/1560385/000110465923103726/tm2326859d1_ex99-1.htm.
2 As of Sept. 30, 2023, Liberty Media beneficially owned (directly and indirectly) 83.5% of SiriusXM shares (https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000090893723000027/siri-20230930.htm).
3 According to the Liberty Media release, “the minority shareholders of SiriusXM would collectively own approximately 16% of New SiriusXM, and the former holders of LSXM common stock would collectively own approximately 84% of New SiriusXM.”
4 Press Release, SiriusXM, SiriusXM Acknowledges Receipt of Proposal from Liberty Media Corporation (Sept. 26, 2023), https://www.sec.gov/Archives/edgar/data/908937/000093041323002208/c107092_ex99-1.htm.
5 See our prior report “Tax Considerations of Berkshire Hathaway’s Exchange of SiriusXM Stock for Liberty SiriusXM Tracking Stock” (Nov. 10, 2021).
6 Series A, LSXMA, has one vote per share; Series B, LSXMB, has 10 votes per share; Series C, LSXMK, has no votes per share.
7 https://www.sec.gov/Archives/edgar/data/1560385/000156038514000015/exhibit991lmcq42013earning.htm and https://www.libertymedia.com/news/detail/200/liberty-media-corporation-announces-creation-of-tracking
8 Excerpts from the Transcript of Liberty Media Corporation at the Morgan Stanley Technology, Media and Telecom Conference held on March 4, 2014 (https://www.sec.gov/Archives/edgar/data/908937/000110465914017022/a14-7564_1425.htm).
9 Press Release, Liberty Media, Liberty Media Corporation Proposes Combination with Sirius XM Holdings Inc. (Sept. 26, 2023) (https://www.libertymedia.com/investors/news-events/press-releases/detail/515/liberty-media-corporation-proposes-combination-with-sirius).
10 Post-spin sales are addressed in Treas. Reg. §1.355-2(d)(2)(iii). This is also putting aside the fact that a non pro rata split-off generally does not present “device” potential (Treas. Reg. §1.355-2(d)(5)(iv)).
11 For a broadly similar transaction, in 2009, Liberty Media Corporation (a different entity than the current Liberty Media) engaged in an RMT transaction with DIRECTV Group Inc., of which it owned 57%.
12 “How Many ATBs Does Liberty Media Have?” (April 27, 2023), attached to this report.
13 IRC §355(b)(2)(D).
14 As a result of transactions (including the purchase of another 50 million shares) on Jan. 18, 2013, Liberty Media acquired ownership of about 50.7% of the capital stock of SiriusXM entitled to vote (https://www.sec.gov/Archives/edgar/data/1560385/000156038513000012/lmc1231201210k.htm).
15 Liberty Media, Annual Report (Form 10-K) (Feb. 28, 2019), see Consolidated Financial Statement Note 1 at page II-39 (https://www.sec.gov/Archives/edgar/data/1560385/000155837019001329/lmca-20181231x10k.htm).
16 Liberty Media, Quarterly Report (Form 10-Q) (Nov. 4, 2021) (https://www.sec.gov/ix?doc=/Archives/edgar/data/1560385/000155837021014622/lmca-20210930x10q.htm).
17 Press Release, Liberty Media, Liberty Media Corporation Reports Third Quarter 2021 Financial Results (Nov. 4, 2021), https://www.sec.gov/Archives/edgar/data/1560385/000156038521000031/lmca-20211101ex99171692a.htm.
18 Control is defined in IRC §368(c) as ownership of stock possessing at least 80% of the total combined voting power of all classes of stock and 80% of each class of nonvoting stock.
19 This transaction is discussed in our report “Tax Considerations of Berkshire Hathaway’s Exchange of SiriusXM Stock for Liberty SiriusXM Tracking Stock" (Nov. 10, 2021), attached to this report.
20 Rev. Rul. 57-144, 1957-1 C.B. 123. See also McLaulin v. Comm’r, 115 T.C. 255 (2000), aff’d, 276 F.3d 1269 (11th Cir. 2001).
21 Lest it be thought that a few shares acquired in a taxable transaction should not be a problem, the IRS’s view, expressed in a nonbinding Chief Counsel memorandum, is that there is no de minimis exception to these rules and that stock acquired in taxable transactions cannot be purged in a subsequent transaction. See GCM 39264 (July 23, 1984).
22 IRC §355(b)(3).
23 REG-123365-03; Prop. Reg. §1.355-3(b)(1)(ii). This potential change-in-thinking is reflected in the preamble to the proposed regulations: “the IRS and Treasury Department request comments regarding whether a redemption of stock should be a transaction to which section 355(b)(2)(C) or (D) applies.”
24 IRC §355(a)(3)(B); see also Treas. Reg. §1.355-2(g)(1).
25 Supra note 3. A 1 percentage point reduction—from 17% to 16%—equates to about a 6% reduction in the percent of SiriusXM owned by the public shareholders.
26 IRC §356(a).
27 Commissioner v. Clark, 489 US 726 (1989).
28 The “meaningful reduction” test was established in United States v. Davis, 397 US 301 (1970), rehearing denied, 397 US 1071 (1970).
29 Rev. Rul. 76-385.
30 For example, assume the value of the stock consideration was $5 per share. In the Clark characterization, a SiriusXM shareholder would be viewed as initially receiving $5.55 worth of New SiriusXM stock, followed by a redemption of approximately 10% of that stock for $0.55 in cash.
31 See discussion in our prior reports attached to this one.
32 We are also aware that, for many traders, the SiriusXM transaction is less interesting in its own right, because of the difficulty of shorting SiriusXM shares. But it is a transaction that the is expected to precede the company the pursuit of strategies for Liberty Live and Formula One.
33 Liberty Media, Annual Report (Form 10-K) (March 1, 2023), which states that “following the closing of the exchange on November 3, 2021, Liberty and Sirius XM Holdings became members of the same consolidated federal income tax group. The tax sharing agreement with Sirius XM Holdings, dated February 1, 2021, governs the allocation of consolidated and combined tax liabilities and sets forth agreements with respect to other tax matters” (https://www.sec.gov/ix?doc=/Archives/edgar/data/1560385/000155837023002514/lmca-20221231x10k.htm).
34 Liberty Media, Amendment No. 4 to Registration Statement (Form S-4) (May 17, 2023), see pages 211-215 (https://www.sec.gov/Archives/edgar/data/1560385/000110465923061496/tm2232384-28_s4a.htm).
35 Id, see pages 144-146.
36 Id. The Form S-4 says “to the extent Liberty Media is responsible . . . for any taxes or losses resulting from the failure of any future transaction involving a Liberty SiriusXM Separation . . . to qualify as tax-free in whole or in part, then any such taxes or losses shall generally be allocated to the Liberty Live Group.”
37 The Form S-4 even includes a summary of how taxes from a possible separation of Liberty Live and Formula One would be apportioned.
38 Also attached to this report.
39 https://www.sec.gov/Archives/edgar/data/1560385/000156038514000015/exhibit991lmcq42013earning.htm and https://www.libertymedia.com/investors/financial-information/sec-filings/content/0001104659-14-000388/0001104659-14-000388.pdf
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