Q2 2020 Earnings Call
[music] Your conference will begin momentarily fleets continue to hold.
[noise], ladies and gentlemen, thank you were standing by welcome to the Fox Corporation's second quarter 2020.
Earnings Conference call at this time, all participants are in a listen only mode. Later, we'll conduct a question answer session and instructions to be given at that time. If you should require assistance during the call. Please press Star then zero as a reminder, this conference is being recorded now turn the conference over to Chief Investor Relations Officer.
An executive Vice President of corporate initiatives Mr., Joe Durango. Please go ahead Sir.
Thank you operator, Hello, and welcome to our second quarter fiscal 2020 earnings conference call joining.
Joining me on the call today are locked in Murdoch Executive Chairman and Chief Executive Officer, John Nolan, Chief Operating Officer, and Steve Tomsic, Chief Financial Officer.
First Laughlin and Steve will give some prepared remarks on the most recent quarter and then we'll take questions from the investment community.
[noise] excuse me.
Please note that this call may include forward looking statements regarding Fox corporations financial performance in operating results.
These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's FCC filings.
Additionally, this call will include certain non-GAAP financial measures included adjusted EBITDA or EBITDA as we refer to it on this call.
Reconciliations of non-GAAP financial measures are included in our earnings release, and our SEC filings, which are both available in the Investor Relations section of our web site and with that I'm pleased to turn the call over to happen.
Thanks, Joe a good afternoon, and thanks, everyone for joining us for our fiscal 2022nd quarter earnings call.
We just reported an exceptional quarter, which really underscores the strength of Fox and our unique position in the market.
No or what that strength and uniqueness on greater display and this past weekend, culminating with our groundbreaking broadcast of Super Bowl 54.
Let me say at the outset, how pleased I am the efforts of our entire company.
Our people delivered a flawless broadcast Sundays game to more than 150 million unique viewers across the country.
Actually guaranteeing its place as the most watched live television event.
Twentytwenty.
We surrounded the Super Bowl within immersive and innovative programming lineup from Miami across Fox Sports Fox News Fox Sports, one and our local stations and we use this enormous platform to launch season three of the mass singer right. After the game, which became TV is highest rated.
Rally telecast in eight years.
On Sunday Fox had the largest revenue day, and TV history generating around $600 million of gross revenue and providing an unmatched platform for over 100 advertisers from the pregame through the mass singer and we delivered extraordinary ratings for our advertising distribution and.
NFL partners.
And while there is a massive amount of planning and activity that goes broadcasting the superbowl. It has not being at the expense of delivering other imperative for our business.
During the first six months or the fiscal year, we have already achieved a substantial number of key operating milestones in support of Foxs growth and momentum.
Among them were attaining number one status for the Fox network and broadcast and maintaining the number one position a Fox news in all of cable.
Delivering our strong sports calendar to viewers and advertisers, particularly across baseball football.
Launching the W. W E.
Acquiring credible and activating Fox bet.
We announced expansion of our local station footprint with the acquisition of two key local market stations.
We completed a substantial number of major distribution deals in line with our expectations, including gaining carriage for Fox News and Fox business on sling.
And we have delivered impressive financial results led by revenue growth.
This quarter, we're really knocked it out of the park.
Steve will provide further color around the financial results shortly but our first half results illustrate the power and importance of our brands to our partners and audiences validating our strategy to build Fox around live sports live news and event programming.
Overall, our top revenue our topline revenue is trending nicely.
Total affiliate revenue increased by nearly 6% in the first six months of the fiscal year.
And our advertising markets, both national and local our brand as illustrated by the current scatter market, where we see pricing well over 20% higher than upfront levels.
The strength of the television advertising market for us as at a level that we have not seen for some time across all the Fox we are seeing growing demand because we are delivering sizable audiences for brands.
At our National networks categories that are leading this intensity include financial insurance, the streamers technology and foreign auto.
At the local level. Most of these same categories are prominent except domestic autos are currently running ahead of foreign.
On the National news side of our business Fox News and Fox business are seeing a significant advertising client expansion across both our linear and digital advertising business led by the financial and technology and technology categories.
The Fox news audience is increasingly sought after by more and more advertisers as I look to reach a large engaged audience, particularly across Middle America.
This advertising strength is based in large part from delivering on the promise made last may at our upfront that Fox will own the fall across the entire Fox network.
Overall, the Fox network to the top rating spot for the fall broadcast season, marking its first number one finish in the 18 to 49 demographic in 10 years.
Additionally, Fox with the only network to achieved year over year gains in both total viewers and in the 18 to 49 demo.
Fox also ranked as the number 100 payment network in the fall in all viewers for the first time in our history fueled by the success of the mass singer.
911, and the top new series product Wilson.
We're focused on sustaining this momentum in the second half the year with the addition of the Deputy and 911, Lonestar and non scripted content like Gordon Ramsay is 24 hours to Helen back the third season of the mass singer and our newest show Lego Masters, which the abuse Tonight on fee.
Alex I.
I suggest washing with your whole family it's truly great.
On the sports side of our business, we continue to drive unparalleled audiences to our signature program.
So far this fiscal year Fox sports has been home to the U.S. Womens National Soccer team a riveting seven gain world series. The inaugural broadcast presentation of WWD Smackdown, and ambitious New College football strategy and the launch of our partnership with TSG and Fox bet.
And clearly it was a great year for NFL football on Fox, which culminated Sunday with the broadcast of Super Bowl 54.
For the second year in a row Fox was able to expand its audience for Thursday night Football College football Saturdays and NFL Sunday.
In aggregate total regular season football viewing on Fox.
NFL and cost of bulk combined was up 14% over 2018.
It's worth noting that no other network was up more than half this level.
While the momentum we've seen at the broadcast network has been strong equally as impressive as the performance of Fox News.
Fox News finished calendar 2019, as a top rated basic cable networks across all cable networks for fourth year in a row, beating its nearest competitors by over 40% and achieving its highest rated primetime in history.
Given the well documented headwinds facing the broader cable industry Fox news his ability to grow its audience over last year is a testament to the enduring power of the brand.
The current news cycle continues to drive passionate viewers to Fox news and it's hard to see that trend subsiding.
All of these achievements point to a simple fact.
Fox is the home to both the top rated broadcast network and then most viewed cable network and that is an exciting position to be in.
Equally exciting is to be the home of the two events that command the attention of the entire country in the same year.
We start accounted twentytwenty with the first event the broadcast of Super Bowl 54 on Fox, We now set our focus on the second event the news equivalent of the Super Bowl the presidential election.
Fox News is branded democracy twentytwenty election coverage is already in full swing.
If history is any guide audience levels and engagement will build significantly as the cycle progresses through the upcoming primaries and caucuses the conventions and the presidential debates all culminating in our election like coverage across Fox News media on Tuesday November Threerd.
As we build towards November the financial benefits are not limited to Fox News, we'll see a sizable AD revenue uplift at our local television stations.
As reference in calendar 2018 during the last midterm election, our stations collectively generated record gross political revenues in excess of $200 million shattering the previous record set during that 2012 Obama Romney election by 40%.
Although we are very early in the political season, we're already seeing signs are further increase political spending with a vast majority of the spend dedicated to the unmatched reach of television.
We saw it on Sunday, let's spending in the Super Bowl on a national level, and we're already beans, and we've already been seeing it at our local stations, which positions us to to deliver a new record for political revenues in calendar 2020.
Our confidence has further strengthened by the fact that we will soon be expanding our station footprint, which already includes stations in Florida, Michigan, Minnesota, Pennsylvania, and Virginia into another perennial swing states, Wisconsin with the previously announced acquisition of the Fox affiliate in Milwaukee.
As you can tell I'm thrilled with the rapid progress that we have made and the recognition of the great value of our networks by that by our distribution partners as indicated earlier, we have achieved our goals and all the distribution renewals, we have completed which reflects the importance of our content to the market.
But of course, we recognize that the trends in the paid subscriber universe has an impact on our business.
As you know we are dependent on our traditional and digital distribution partners and their business plans for our inclusion in their pay television retail offerings.
Well I'm not going to predict where a normalized pay TV subscriber base ends up in the near to medium term I know this ecosystem will still be the largest component of our revenues for some time.
Nevertheless, we have begun allocating capital to expand our revenue base, while preserving our subscriber fee relationships into direct to consumer initiatives, which will grow and importance over time.
Fox Nation, Fox bat and credible our three recent examples of this but we continue to evaluate opportunities where fox can bring unique value directly to consumers, while sustaining existing business models.
Nonetheless, there are solid growth in momentum at the comedies existing digital businesses with total engagement, increasing last quarter by over 40% versus the previous quarter.
Fox News digital had a record calendar 2019, beating Cnn.com and both total views and minutes consumed and for the first time Fox News digital average over 100 million unique comscore monthly visitors.
Fox Sports also had a record digital year in calendar 2019 grown both total video views across streaming and social platforms and total minutes consumed by over 20%.
Was also our highest streamed regular season for the NFL on Fox with growth of 57% last over last year.
And to refer to the Super Bowl one more time the game was the most streamed ever 11.7 million users streamed all or part of the Super Bowl.
And 70% of their consumption was on Fox owned platforms.
While we have remained focused on executing against our operational plans and hitting our financial targets. We have also demonstrated how we look to deploy our capital to an appropriate balance organic investment strategic M&A and return of capital to our shareholders.
On the organic investment side, the previously announced $200 million to $250 million EBITDA investment began to ramp up this past quarter with the broadcast of Ww Smackdown, and our investments in greater originality and co production rights at the Fox network, along with investment in our digital initiatives led by Fox name.
Ian and the refresh Fox business.
In terms of strategic M&A in October we deployed approximately $260 million for the previously mentioned acquisition Accredible labs.
In a short time, we've owned credible apps, we've seen the signs of the excess exceptional growth the business is capable of.
For example.
During calendar 2019 credit credible more than doubled as cumulative registered user base and experienced record closed loan volume both of which drove substantial topline revenue growth.
We have also committed around $300 million to acquire the Nexstar television stations in Seattle and Milwaukee in exchange for our station stations in Charlotte.
We expect this deal to close in the next month or so.
And our commitment to return capital to our shareholders remains an integral element of our capital allocation strategy. In addition to that just announced semiannual dividend dividend.
We have now finished the initial $500 million of share repurchases that we committed to when we announced a 2 billion dollar author authorization three months ago.
As we have consistently noted we remain committed to deploying capital in a disciplined manner to maximize shareholder value through this balanced approach.
Now I'll turn the call over to Steve to provide more detail on our financial results.
Thanks, let Glen and good afternoon.
As you just heard our operating momentum continued in the second quarter, we continue to exceed the internal goals that we commenced the week.
This past quarter, we delivered strong topline growth led by an increase in total affiliate revenue of 7%.
We achieved this growth despite aggregate industry pay TV subscribers continuing to decline at a rate in excess of 4% of the calendar year 2019.
During this period the losses across traditional distributors, many of whom reported last week, where at least partially offset by continued growth at digital MVP days, which subscribers of growing 2.3 million.
In this past quarter, we saw a digital liberty paydays grow by over 1.5 million, representing sequential quarterly growth of over 20%.
As we've highlighted in the past the natural seasonality of our business means the second quarter is traditionally the low watermark from an EBITDA margin standpoint.
This is primarily due to the timing of broadcast sports and entertainment expenses that are concentrated in the full season.
This includes the investments in sports and entertainment content flux network, which have week edge, which as we have previously outlined set us up well to complete our remaining distribution renewals in this cycle and achieve our longer term financial targets.
Let me now take you through our second quarter results and along the way remind you of some key factors that shape the remainder of fiscal year.
In the second quarter, the company reported total revenues of $3.78 billion.
5% over the comparative period in fiscal 2019, reflecting revenue growth across all operating segments.
EBITDA was $261 million, which compares to the $445 million generated in the prior year period.
As growth at the cable segment was more than offset by lower operating results for the television segment and the impact corporate expenses at the other segment now being reported on an actual basis.
The latter reflects the costs of folks operating as a standalone public company in the current quarter versus the presentation of carve out financial statements in the prior year.
From a bottom line perspective, net income attributable to stockholders of $300 million will 48 cents per share was higher than the $8 million or one cents per share in the prior year quarter.
This growth was primarily due to the change in fair value of the company's investments recognized in other net including the styles group and road.
Which together have a current market value of approximately $1.1 billion.
Excluding this impact and other onetime items adjusted EPS of 10 cents was down compared to last year's 43 cents per share, reflecting the change in EBITDA and interest expense, which as we have flagged in the past now reflects the amount associated with operating a standalone company.
So now turning to the performance of our operating segments for the quarter, where cable network EBITDA of $556 million was up 7% on revenue growth of 2%.
Cable affiliate revenues increased 2% is the impact of higher average rates across essentially all of that brands was partially offset by the net decrease in pay TV subscribers that I mentioned earlier.
Assuming current subscriber volume trends continue we continue to anticipate modestly accelerating growth in cable affiliate revenue in the second half of the fiscal year as the full impact of rate resets from recent renegotiations begins to take effect.
Titled Advertising revenues decreased 5% due to fewer units at Fox news media, including higher Preemptions associated with its breaking news coverage of the impeachment hearings.
And the absence of USA programming at the National Sports networks.
These impacts were partially offset by strong results from our coverage of the MLB American League Championship series between yield Yankees and Houston Astros on Fox Sports one.
Cable other revenues grew by $32 million.
This increase was driven by high sports Sublicensing revenue and type of the booking revenues associated with the heavyweight belt between Wilder annuities.
As well as subscription revenues from Fox nation.
EBITDA cable segment increased 7% over the prior year, reflecting these higher revenues while costs were essentially held flat.
From a cost perspective savings from our non renewal of USA programming were offset by the contractual increases on existing sports rights agreements at the National Sports networks.
Along with higher costs at Fox News media, which includes our investment in digital.
It is worth noting that we anticipate elevated growth in casual segment expenses fiscal third quarter versus the prior year.
This is driven by increased costs that are national sports networks, reflecting both contractual increases for our sports rights and the production costs of the show the programming around the broadcast of Super Bowl 54.
It also includes increased costs at Fox news media related to that coverage of the presidential election, and continued investment in folks nation.
The television segment reported an EBITDA loss of $214 million.
Higher than the loss of $40 million in the prior year quarter on revenue growth of 5%.
The revenue growth was led by 18% increase in television affiliate revenues, reflecting double digit programming fee growth from non owned station affiliates and double digit.
Direct retransmission revenue growth.
Owned and operated stations.
Television advertising revenues in the quarter increased $39 million or 2%.
This was achieved despite us lapping the record political advertising revenues at our owned and operated stations from the midterm elections in the prior year quarter.
This result, this result was underpinned by the very robust advertising market conditions that Laughlin, just described coupled with stronger NFL ratings. The programming successes, we have delivered at flux entertainment compelling seven game World series, and the Indra and the introduction to the schedule of W.W.A. Friday nights Smackdown.
EBITDAR television segment decreased $200 million over the prior year as an increasing expenses over of over $300 million more than offset strong revenue growth.
The increase in expenses was due to the anticipated increasing sports programming amortization and production expenses led by the NFL along with investments we have made in television segment programming.
During the quarter. These investments included the premiere of Wwb.
The expansion of original entertainment programming and Aperitifs, a patient co production arrangements with third Party studios.
Finally from a piano perspective, the net EBITDA loss other segment amounted to $81 million, which reflects a full quarter of standalone costs as opposed to the caveat basis of presentation in the corresponding quarter the prior year.
Turning now to cash flow over the first six months at fiscal 2020, the company generated negative free cash flow of $366 million, which we calculate as net cash used in operating activities.
US cash invested in property plant and equipment.
As a reminder, this anticipated use of capital reflects the typical seasonality you should expect to see in the business.
He is the first half of fiscal year is impacted by the working capital deficit that results from the concentration of our annual sports rights payments and the recognized but yet to collect peak advertising revenues that are associated with sports and entertainment programming in the full broadcast season.
These factors reversing the second half of fiscal year as we harvest cash from the collection on prior quarters advertising revenues and payments the sports rights subside, resulting in significant cash surplus.
On a full year basis, we will benefit from the natural low working capital usage of that business, along with our cash tax benefit and will therefore convert a significant percentage of the company's EBITDA to free cash flow.
From an overall balance sheet perspective, we ended the quarter with just under $2 billion in cash and $6.8 billion in debt.
As Lachlan mentioned earlier, we've completed the initial $500 million stock repurchase goal that we add that we outlined three months ago, comprising $350 million of class a shares and $150 million of class species.
We will also have seen that we just declared a semiannual dividend of 23 cents a share.
Finally, as part of our balanced approach to capital allocation, we closed on the acquisition of 67% stake and credible labs in early October.
And with regulatory approvals announced acuity, we expect to seeing close the previously announced next television stations transaction at a net purchase price of approximately $300 million.
And with that I would now like to turn the call back to Joe.
Thank you, Steve and now we'd be happy to take questions from the investment community.
Ladies and gentlemen, if you wish to ask a question. Please press one than zero on your Touchtone phone, you'll hear town indicated in place in Q made or move yourself from Q at any time by once again pressing one than zero.
And the speakerphone, please pick up the handset before pressing the numbers and has been requested that you limit yourself to one question. Once again, if you have a question. Please press one zero at this time.
One moment please for our first question.
And the first question comes line of Michael Nathanson. Please go ahead.
Thanks, I have a two for for anyone who wants ticket.
The first one is when do you guys separated this new company out. The assumption was are you have more boarding clout with distributors because you have less channels to defend.
As lock on said you achieve your goals and in these negotiations just happened can you give us a sense of what those goals were or maybe how the goals have changed given as you know the change in terms of landscape record coding and then secondly, I believe we still own 5% stake in Roku could you talk about how about assets fits in with your cap allocation scheme.
Especially in light of what happened last week with.
The impasse you guys had with Rocchio. So so thanks.
Hey, Michael Thank you very much for the the question of two questions.
John you want to address.
Our success with affiliate fees and I'll address broker so Michael thanks the.
I would say the first six months of the year was unprecedented for us with the amount.
Of the renewals that we had all of which were successful against our interim internal plans.
And you're right when we said in the separation that our goals were different than we were at 20 ones yet.
It was because we now have the opportunity to use the full power and leverage of.
Networking Fox news.
Pricing standpoint, a full distribution standpoint.
And your phrase of bargaining cloud.
Those as local referred to earlier or the two most successful television channels in America right now.
So we were able to use that to achieve multiyear pricing.
For those channels at levels that were at or above what we planned and distribution fully.
With our distribution partners I think those are the two that we were really focused on.
And in light of that Michael I think we can say that I know, we can say that you know.
Our announced.
Expectation that that we will do a $1 billion of additional affiliate.
Revenue by calendar cut a tool.
We are absolutely I'm still expecting to hit that number on an anda.
Cost at our across a hurdle so and that's that's that's factoring in.
Subscriber volume declines so on I think we're really doing a terrific job and driving those affiliate fees are in regards to ROE COO.
As you know sort of widely reported last Friday.
Our our distribution deal with broker.
Was expiring we went through frankly are very normal course sort of negotiation.
With them not unlike other negotiations we have with.
All of our.
Distributors.
What happens in these negotiations.
And often this is what becomes public is both sides prepare for.
I non resolution of the issues, but ultimately they like all of our distributors and platform saw the value of some of the Fox brands and content on their platform and we were able to resolve.
Our differences and agree to renew agreement I really I think to mutual benefit.
Throughout all it was a very professional we rush huge regard.
For Anthony would and his management team at Roka, we think they're doing a tremendous stake.
Position the company.
Really be one of the.
The leading if not the lead beneficiary of of over the top streaming.
And we are.
We are happy happy shareholders in the company.
I think we're ready for the next question.
The next question comes the line of select serve Quadrani with JP Morgan. Please go ahead.
Thank you on Fox news, you've seen such a great rebound much given the news environment looks like this momentum will continue I guess my question is how can you capitalize on their ratings grassman advertising perspective, do you have enough inventory to south.
And then just a follow up on on the NFL and any color you give us in terms of when you think the discussions from there are no all night might start to kick in.
So.
On advertising.
So where youre right we were were obviously.
Doing well because of our of our rating strength and the obviously not just.
At the Fox network, but but in Fox Fox.
News as well and.
The and wish him, whereas as as I mentioned in my in my earlier comments, we see that that ratings.
Strength.
Just continue on.
In fact last night over the the a state of the Union our broadcast.
Thank you I now have seen the numbers, maybe many of you have already but Fox news.
Was ratings were double.
The ratings of CNN and MSNBC combined.
So it's really is a tremendous.
Performance.
What we what we've been doing and I think others, who have followed our lead is working to during our two two to build and as many I advertising units. As we can this includes you know using the innovative use of sort of a squeezing back advertising and having sort of a split screen.
Split screen, a sort of experience where you can now covers on the revenues while also.
Showing the the at or or the AD. Greg. So we are we are gathering as much of that.
Our revenue as possible.
I think the important note, though around Fox news advertising is really the expansion and the number of marketers.
And partners that we have on Fox news, there's our growing sense in the market that if you want to reach a middle America.
Hi.
There's no better place than placing your your brand your advertising than on Fox news. So.
The advertising team as during a tremendous job and we expect to capture significant amount of so the upside revenue as we run through this political season, and that's not to say phenomenon and I mentioned the local stations, obviously in California, where we're about to markets in Texas, where we have three markets North Carolina, Virginia.
Minnesota and now with the.
Addition, soon of Wisconsin, now we are very well placed.
And swing states will be a significant amount of of.
Advertising spend towards this election.
Second part of the proposals on all the I thought sorry.
To provoke for both on the first part of the question.
NFL renewal conversations have have or early stages, but they certainly have begun we obviously spent practically all of last week with the NFL bulk administration and many of them the terrific.
Family somebody on the owners of the teams we feel we're in a good place.
To our to work with them as our most important.
Partner, our to our to our renew our rights going forward, but it's early days in the guy and the conversations.
Operator, I think we can go to the next question.
Our next question will be from the line of Michael Morris with Guggenheim. Please go ahead.
Thank you good afternoon on the affiliate revenue in the fiscal second quarter, you'd guided to sort of a similar levels. What you saw in the first but you reported that acceleration.
My question is can you parse that was it all virtual mbd, driven where there are other parts didn't have anything to do a tier.
New renewals that you done and is that incremental tailwind as you move into the step ups next year that that will also be beneficial and then just on the digital side, you've you've been clear about your partnerships with with your traditional providers you have left the door open to doing something digital I believe that's the case.
If or when at the time came that that would make sense. If you look at your current content base do you have what you need.
To perhaps pursue that or are there specific places that you would still want to bolster to have a product ready. Thank you.
If you take that I'll take the affiliate.
Michael intensity affiliates, a combination of what you just outlined so we got the benefit of the of an increase in that stub period in the final quarter. The calendar you with with a couple of the renewals that we completed.
Last calendar year, the other piece to it is just.
A little bit around subscriber mix way, we obviously talk to the in the sort of heightened level of growth at the digital digital MVP days and given the sort of more recent deal vintage there the pricing is a little bit better than some of the older deals and so we benefited from that but it doesn't as I said in my opening remarks, we continue expect.
That will get progressive increases in.
Cable affiliate growth going into the second half of that fiscal year.
And then Michael on the the digital question I think you know we were always on play to our strengths and are on our strengths are very clearly a live news lives for and Big event Entertainment programming.
And if we yes do we have what we need to succeed in those in those.
Sectors, whether it's on broadcast or in a in a direct to consumer.
Experience, we have the money on the two of the most watched channels in America that number one broadcast on network and the number one.
Cable channels, so clearly.
Our audiences are are engaging with our content on their engaging with our content today and a number different forms not just broadcast I mentioned in Miami in my earlier remarks, No. I think was 11.7 million people watch the Super Bowl by a streaming are broken Super Bowl of our streaming.
70%, which actually a remarkable number 70% of those about 11.7 million washer the on platforms that we own.
So I think we are we are already set progressing down down down that path and I should also just call out Fox nation, which is obviously a.
No really excellent sort of direct to consumer.
Product out of Fox News, a EUR, 80% of the people, who sample Fox nation or take a free trial 80 present percent of them a convert to paid took to paid subscribers and December and January on where the two highest months in history in terms of both.
Subscriber acquisition, but also in and just as importantly in terms of engagement on the platform. So we're really very happy with how how Fox nation is progressing as well.
Operator.
The next question please.
Our next question will be from Doug Mitchelson with credit Suisse. Please go ahead.
Thanks, so much laughlin its interesting there here, you mentioned sort of investments and direct to consumer. So I. Just wanted to continue along about theme is this sort of an urgent priority for the company and at or something newswire lead into the next three years, a few years to capture growth and.
And I think what investors want to know is at what point would you take Fox Broadcasting I work for Fox News put them on line I'll look hard at maybe a big premium tier wholesale rate, but what has to happen in the broader environment for that to become an interesting.
Got it for the company and and if I could I was just could ask John and add the weeds question you had passing our on last year second half the season as well so you're starting to comp year over year on that but I imagine the AD rates this year, a little bit better than they add rates last year and any sort of color around sort of had rate increase on that show would be a would be super interesting. Thank you.
Hey, Doug Thank you very much.
It's something we're going to what we're always looking at but but we also have a an eye on not damaging you know that the current business model, where we generate no, yes, I'm still and tremendous and growing amount of revenue from from our.
Mark our cable subscribers. So I think that we have the capability to go direct consumer we took the technology that we built a with us when we when we separated.
From from Disney We are you know.
Running direct to consumer businesses with Fox sports in pay per view with Fox nation.
And in a different manner through through credible. So so we're happy where we are now and we'll see what the but the future brands.
And Doug just look advertising I think both local and Steve touched on that.
Advertising.
We just haven't seen in markets like this for awhile and each of our products is leaning into this each of our shows and whether it's entertainment sports.
But just as guide you will remember the upfront was up 10% and scatter is now up over 20% on top of that.
I would like messing it was fully sold.
In the upfront so we're enjoying the benefit of what is a very active market right now.
Okay.
Operator, I think we have time for one more question.
Our last question come fine of John Hodulik with you PS are you being please go ahead.
Great. Thanks.
Maybe for lock and following up on the political question and the 200 million can you give us some more color on the.
For the pacing as you saw that spend last election cycle through the year and maybe the benefits you saw what on that and maybe that sort of TV side and versus the cable side and then.
Secondly, as you might be for Steve. The you could you completed the 500 million buyback.
Obviously very low leverage.
How should we think of the buyback pacing gulfport.
I'll, let John answer the buyback or the buyback piece, but but I mean I phone steal your thunder job, but we fully expect to to spend the remaining a amount of a $1.5 billion of that but oh, we have a approval to to buy back shares. So.
But I'll, let John give some more detail on that color.
On your headline.
Oh, sorry, John.
On the on the political are pacing, it's really it's very strong, but we know where we're at the at the very beginning of it.
Obviously.
We've seen some national advertising from from both both sides of the political spectrum on the local side, we haven't seen a any advertising it locally from from the President's re election campaign, but of course, you've seen a lot.
Of advertising already started coming from from the that Democratic side, it's relatively short on them, but I think was reported in other Bloomberg campaign has aspect of it sort of double its advertising spend earlier this week, but the Bloomberg campaign is buying on a week to week basis.
So it's hard to predict that out but.
Obviously, we expect it to be to be very strong and yes, particularly as as I mentioned in the markets of our local TV stations, Hey, John It's John I'll, just I'll ended on really something often said at the beginning this is with respect to the buyback which is.
Our commitment to the two returns of capital to the shareholders.
Is just an integral element to the overall balanced capital allocation, we committed to a 2 billion authorization and we're going to complete that.
Okay.
At this point, we are out of time, but if you add any further questions. Please give me or Dan carrier call. Thank you once again for joining today's call.
Thanks, everyone.
Ladies and gentlemen, does conclude our conference for today. Thanks for your participation infusion Eighttwenty executive teleconference. You may now disconnect.