Adidas’ Yeezy crisis has hit the company hard — but its first-quarter financials were not as bad as expected.

The sportswear giant reported $5.82 billion in Q1 2023 revenue — a 1% dip from $5.85 billion a year prior.

Those numbers actually outperformed projections from financial analysts, who expected a 4% drop, according to consensus estimates compiled by the company. Adidas also reported that it had an operating profit of $66.19 million, which beat analyst projections by $16.55 million.

Since cutting ties with Ye — formerly known as Kanye West — in October due to the rapper’s public antisemitic remarks, Adidas has been struggling to figure out what to do with the mountain of unsold Yeezy sneakers in its inventory.

CEO Bjørn Gulden admitted that the loss of the Yeezy brand is “of course hurting us.”

Earlier this week, a group of Adidas shareholders filed a class-action lawsuit against the company, saying it should have known better than to partner with Ye.

With superstar Beyoncé also leaving the brand in March, the company has turned to its other product lines to lift sales: Adidas has seen “extraordinary demand” for its Samba, Gazelle, and Campus brands and has begun producing them at larger scale.

With another strong start to the Formula 1 season, Liberty Media continues to evolve.

In its quarterly financial results, Liberty Media reported that Formula One Group brought in $381 million in total revenue for Q1 2023 — a 6% year-over-year increase from 2022 ($360M).

However, the group’s operating income decreased slightly year-over-year from $19 million to $16 million due to a $4 million increase in corporate expenses.

Liberty execs are focusing on the positives, though.

“The race weekends are drawing huge crowds, with the Australian Grand Prix hosting 445,000 fans and sellouts for the majority of the remaining calendar,” said Formula 1 president and CEO Stefano Domenicali.

Formula 1 is already expanding on its revenue-generating opportunities, recently signing a licensing deal with PUMA and allowing Brad Pitt to drive a real F1 car alongside drivers while filming a new movie.

Brave New World

Liberty’s other major sports holding — the Atlanta Braves — also enjoyed success in its leadup to a new season.

Atlanta Braves Holdings, LLC reported $31 million in total revenue for Q1 2023 — a 35% increase from a year prior ($23M).

Liberty reports that the team’s home opener on April 6 drew 42,000 fans — the largest crowd for that specific game in Truist Park history.

The company aims to complete its planned split-off of Braves Holdings and the reclassification of tracking stocks to create Liberty Live Group tracking stock by the end of Q2.

An earnings miss and a spat with a subsidiary company led to heavy losses for Penn Entertainment.

Penn released its earnings report shortly after the company overrode Barstool executives to fire host Ben Mintz, who uttered a racial slur while reading song lyrics on a Barstool show.

The firing was announced on Wednesday, and on the following day, Penn’s stock plummeted 13.3%, which Barstool founder Dave Portnoy attributed to Mintz’s firing. Penn completed its acquisition of Barstool in February for a total of $551 million.

Penn brought in $1.67 billion in the first quarter, up 7% year-over-year, with net income growing from $51.6 million to $514.4 million.

The casino and gaming company’s revenue beat expectations but missed significantly on earnings per share.

Regulator Watch

It’s possible Penn is being cautious about Barstool’s content after it drew scrutiny from Massachusetts’ gaming commission for its history of racist and misogynistic content, though regulators ultimately awarded the company permission to operate a sportsbook there.

“I’m having a hard time reconciling branding a sportsbook in Massachusetts … that I have concerns [for] not only responsible gaming, but simply the character and reputation and honesty of [that brand],” said state commissioner Eileen O’Brien.

Penn’s sportsbook began operating in Massachusetts and Ohio in Q1.