Q4 2021 News Corp Earnings Call
You are currently on hold for this new core News Corp for acute fiscal 2021 conference call. At this time, we are assembling today's audience and plan to be underway. Shortly we appreciate your patience and pleasingly and on the line.
[music].
And the news Corp fiscal fourth quarter of 2021 earnings call, we share our earnings press release about 30 minutes ago, and it's now of posted our our website at news Corp. Dot com on the call today of Robert Thomson, Chief Executive and Susan Penuche out Chief Financial Officer will all be with some prepared remarks, and then we'll be happy to take questions from the investment community. This.
Call of May include certain forward looking information with respect of news Corp business and strategy actual results could differ materially from what it said newscorp's form 10-K, and form 10-Q filings identify risks and uncertainties that could cause actual results of differ and contained cautionary statements regarding the forward looking information. Additionally, this call will include the <unk>.
And non-GAAP financial measurement, such as total segment EBITDA adjusted segment, EBITDA and adjusted EPS, the definitions and GAAP to non-GAAP reconciliations of such measures can be found and our earnings release with that I'll pass it over to Robert Thomson for some opening comments.
Thank you Mark the past year has been of severe test for families for countries and for companies the stresses and strains of the pandemic have stretched the social fabric and the commercial canvas I want for mostly to express my gratitude for the employees of news Corp, who around the world have navigated these testing times.
And with professionalism and with the principal the if it's their creativity and their commitment have built on the company's proud foundations and being a catalyst for these impressive results for news Corp, and for a group of companies.
Overall revenues and fiscal 21 rose, 4% and by 30% in the fourth quarter that is 30%, indicating that the company is surely gaining and momentum while profitability improved by 26% for the year.
With the major tech platforms. These deals the financial terms of which of confidential will add significant revenue annually clearly into non figures and our of profoundly important part of the ongoing transformation of the content landscape.
We are also watching the evolution of the digital AD market, which historically has lacked transparency the active interest of regulators around the world should reduce the opacity and provide higher yields for publishers.
At Dow Jones subscriber growth continued at pace, leading to a significant increase and segment EBITDA for the fourth quarter and for the year up 15% and 41% respectively.
The full year segment EBITDA was indeed, the most lucrative since the company's acquisition.
Digital consumer subscriptions, which were 26% higher and the quarter contributor to that growth as did and overall increase and advertising revenues for the year of 4% as I search and digital ads more than compensated for a decline in print advertising.
At the Wall Street Journal subscriptions grew 15% year over year, and the fourth quarter, reaching nearly $3.5 million and digital only subs growing by nearly 100000 and from the third quarter and by 21% year over year now comprise nearly 80% of total subscriptions.
Advertising and the fourth quarter rose, 45% and digital advertising was 53% higher.
It is worth highlighting the success of our risk and compliance business, particularly as we contemplate the future potential of the just announced agreement to acquire Opus.
Revenues of at risk and compliance increased 23 per cent for the fiscal year and burdened by 30% in the fourth quarter compared to a year earlier, marking 6 straight years of over 20% growth.
We believe that the professional information business, we will continue to expand at a strong rate and that opus will be the cornerstone for of commodities energy and renewables digital business that will have a long term positive impact on our earnings we are excited to be adding a new grossly, but the Dow Jones, whose performance has manifestly.
Being exceptional we firmly believe opus and Dow Jones will be more than the sum of their pods and.
Acquisition of Investor's business Daily was completed in May and we expect to see the positive impact of this high margin digital operation and coming quarters. We believe there are multiple opportunities to cross sell and upsell products and IBD will benefit from Dow Jones reach and Dow Jones will prosper from the IBD.
The range of high value specialist investment offerings, we are confident that elmar and mature and the team at Dow Jones of poised to deliver ongoing excellent results.
The Fox tell narrative is particularly positive.
The early emphasis on streaming and on securing long term valuable sports and entertainment rights has put the company on a decidedly upward trajectory.
Paying subscribers were 40% higher and fiscal year revenue rose, 10%, while our EBITDA growth was 11% there was a noticeable acceleration and revenue growth and the fourth quarter when it surged, 33% driven by Australia and products and thanks in part of positive currency fluctuations.
The strong growth industry and business, which is taking advantage of and successfully monetizing existing rights was evident in the fourth quarter with the number of total paying streaming subscribers was 155% higher than at the same time last year. We are obviously pleased with the exponential evolution of both.
Kayo sports streaming product.
Which has rights to the Australia is most popular sports and binge or entertainment streaming services as they combined world class technology clever user interfaces and high quality compelling content.
And it's worth pausing for a moment to consider how the Fox tail narrative has changed decisively and positively over the past 18 months. Then we were being asked whether we would need to put extra funds into Fox tail and now we have attractive options for a growing thoroughly contemporary business that has a tangible upside.
Our immediate task and debt of our team led admirably by Siobhan Mckenna and Patrick Delaney is to keep driving the business to keep striving because those options will certainly be enhanced by continued success.
Digital real estate is another fast growing sector for the company and we are proud of the performance of both Rei and real term. Many of you will recall there was of certain skepticism when we acquired move the real to dock compare and just sit and doubt about our ability to turnaround and the company's debt and flagging fortunes well is no average.
Overstatement of side, there has been a real to run asos with fiscal 2021 profit contribution for move increasing by $100 million as its revenue scaled for.
For the year revenue grew by 36% and the rate accelerated to 68% and the fourth quarter.
The audience numbers hit record highs during the quarter as measured by the independent Comscore audience growth has exceeded that of Zillow and trulia for 17 successive months and average more than 20 percentage points faster in the last 8 months that is of telling testament to the great work by Tracey Fellows David.
The ROE and to all it real time.
The digital sales the rediscovery of boxes of medium and and extensive lucrative backlist for.
For example, the companies certainly profited from the immense popularity of Bridget and and the eponymous Netflix series, which has been extended into a second season to the benefit of Julia Quinn's novels, and Harper Collins.
The company's prospects and its backlist have been bolstered by the addition of the Houghton Mifflin Harcourt books, and media segment, which has a living library of 7000 titles, including the perennially popular George Orwell and curious George.
We also acquired the U S rights to J Ah tokens works, including the Hobbit and the Lord of the Rings trilogy, and now have global English language rides, which will surely benefit from the upcoming blockbuster Amazon series based on those classic could you Rubel books.
Brian Mary and the Harper Collins team have focused on driving digital and direct to consumer offerings and it is worth noting that a book sales rose 14 per cent during the year, well audiobooks expanded of healthy 22%.
Clearly there is much interest by various podcast related companies and our unique audio book offerings, and we stand to gain from the proliferation of streaming audio.
For those of you who of bruised and numbers. It is clear that there has been a strong improvement and the profitability of the news media businesses with news UK used for Australia, and the New York Post all performing admirably and contributing to news cause overall enhanced profitability.
There was discipline cost control and sage leadership throughout those businesses and a strong recovery and advertising during the fourth quarter.
And the UK businesses delivered a significant profit contribution for the year with digital subscription is increasing markedly and listening at wireless rising sharply during the European football Championships with advertising benefiting accordingly, and we look forward with alacrity to the launch of the Premier League season next week, the Sun remain the country's largest dig.
Real news brand and advertising revenue across the properties and the UK rebounded and the fourth quarter compared to of you earlier.
Sometimes stress we the.
Let's have been a crucial part of the unprecedented success and provided a firm foundation for ongoing revenue growth and increasing profitability.
As I mentioned earlier, and we are generating record profits and cash and that has given us the ability to make opportunistic acquisitions to bolster the company and generate even more momentum.
We will certainly be thoughtful and strategic and deploying of assets and will as always be cognizant of our responsibility too and the interest of all of our shareholders and now I had you ever the Susan Panocha, who will provide more salient details about and extraordinary of.
Thank you Robert Fisk.
Fiscal 2021 fourth of course, the total revenues for almost $2.5 billion up 30% the highest level since the second quarter of fiscal 2019, when we still I News America marketing and <unk>.
Total segment EBITDA was $210 million of 8% versus the prior year, including record high segment, EBITDA and digital real estate services total segment EBITDA included several non-recurring items that depressed year I V of comparisons is quarter, including $49 million of nonrecurring legal settlement and transaction cough.
The results also include $11 million of 1 of course, the Foxtel, which I'll come back to.
Excluding the divestment of news American marketing acquisitions currency fluctuations and the other items displaced and I release adjusted revenues increased 20 per cent and adjusted total segment EBITDA increased 26% driven by strong performance of digital real estate services and a big year over year improvement in the news media.
For the quarter, we reported of net loss to share of 2 cents compared to a loss of 67 cents and the prior year losses loss include of $292 million of non caching payment charges, primarily related to success and the UK and Australia.
Fiscal 2021 results included of 64 million dollar tax benefit you too and adjustment to evaluation allowance and the U S and of $54 million non-cash writedown of Fox held investment related to the Nickelodeon, Australia and joint venture, which is now covered through a set of <unk> affiliates agreement.
Adjusted earnings per share with 16 cents and the course of compared to a loss of <unk> and the Pri yeah.
Importantly on of 48 basis free cash flow available to use Colby and prove to $731 million for $180 million and the prior year driven by higher total segment, EBITDA improvements and working capital and lower capital spending.
Moving onto the results for the individual reporting segments, starting with digital real estate services.
The segment revenues for $450 million and increase of 74% compared to the prior year of sharp acceleration from the third quarter growth rate of 34%.
The performance was driven by another record quarterly performance that move together with very strong results and <unk>.
And to a lesser extent of positive impact from foreign currency fluctuations on and adjusted basis revenues increased 59%.
[laughter] segment, EBITDA arise, 92% to $136 million or 99% on and adjusted basis.
News revenues for $186 million and 68 per cent increase your eyes of year with real estate revenues rising 77% a significant acceleration from the 43 per cent growth in the prior quarter.
Move contributed $17 million to the segment EBITDA growth of this quarter, achieving strong profit improvements to spot $30 million of of digital marketing expenses consistent without commentary that the bulk of the expected increasing costs and the second half would materialize in the fourth quarter.
For the for fiscal 2021 year move increased its profit contribution by $100 million and what's the single biggest profit drive across the news Corp. The Shia.
We sort of accelerated revenue growth across the bite the traditional lead generation and referral businesses and the quarter. The traditional lead generation business continued to benefit from strong agent demand improved retention rates higher yield and lead for you and gross revenues from the referral business represented approximately 30% of total mook revenues of.
From 25 per cent and the prior quarter, partly due to seasonality with revenue growth of driven by and increasingly volume record high and pricing and higher referral fees.
In addition, advertising and rental revenue <unk> strength during the quarter with the combined revenues more than doubling versus the prior year only partially offset by the lower revenues, resulting from the sale of top producer and the third quarter.
[noise] real total comes traffic reached the quarterly record of 106 million average monthly uses reflecting a year over year increase of 32% lethal you agree 14 per cent year over year of slower growth rate and the prior quarter as we <unk> tough of comparisons with the prior year, which saw growth rates in the mid thirties, coupled with the ongoing industry.
[noise] supply constraints compared to the prior quarter lead for you and grew 8 per cent.
Alright, I had an exceptional course of with revenue thriving 79% year over year to $227 million, including of sushi $4 million or 27 per cent positive impact from currency fluctuations rei's results benefit from of material increasing residential premier dip revenue. Despite the absence of of price increase the school year.
As part of <unk>, COVID-19 support initiatives.
[laughter], a stray and national residential and you buy listings for the quarter rose, 54% with milk and and Sydney, both up 64% of growth rates with somewhat exaggerated by the impacts from COVID-19 months for Ya.
Listing volume, so not only higher than the price, but also higher than the fiscal 2019.2018 levels traffic remains robust with total visits to real estate Dot Com. Today, you said you at 123 million of 8% you're ready for Ya and the visits multiply our it guy and sits nearest competitor, reaching a record high of like the 3 point for time.
And Jean.
Please refer to Rei's earnings release, and the conference call. Following this cold for more details.
Turning to the subscription video services segment revenue for the quarter with $542 million up 33 per cent versus the prior year and included and $85 million or 21% positive impact from foreign currency fluctuations.
The growth rate also improved sequentially.
It just did revenues increased 12 per cent with higher revenues from the streaming products move and upsetting the revenue declines from the broadcast product and the quarter helped by the COVID-19 comparison.
Title closing paid subscribers across the <unk> reached nearly 3.9 million as of June 30th with the total subscription, including Triallist all of a $4 million and were up 40% versus the prior year of material acceleration from the third quarter, driven by continued growth and paid streaming subscribers and a year I V recovery income.
<unk>, which was hit particularly hard from COVID-19 lost Ya.
Sequentially paid subscribers rose 10 per cent.
K I total subscribe has increased to almost 1.1 million and binge total subscribe as increase to 827000 and the aggregate total streaming subscribe is reached over 2.1 million with paying subscribers up more than 150 per cent to just over 2 million streaming products and now delivering meaningful growth at scale and.
Oh, the 50% of the <unk> total paid subscribers and now on the streaming platform.
Residential broadcast subscribe has declined to less the 1.7 million.
And <unk> and commercial subscribers woke growing sharply your I P. A continued to be impacted by COVID-19 restrictions and for the Lockdowns, notably and the accommodation sector.
And we soap real cough Chen motor right for the past 2 quarters to 17.1 per cent, but up from 13.2% and the pie with the team continuing the focus on retaining high value subscribers and driving output growth.
I'll, probably increase the 4% to 81 of stray and dollars from the price of a partially offsetting broadcast subscribe of volume declines.
Segment EBITDA, the client sushi 7 per cent to $66 million 46 per cent on and adjusted basis as the communication you know prior cool the decline with largely timely related driven by iced tea for a million dollars of high of sports programming rights and production costs and the quarter, which we didn't having the <unk> G to COVID-19 together.
And with high of marketing expenses. In addition, Foxtel had approximately $11 million of 1 tonne cost mainly related to Ikea Street and <unk> for promotional activity.
Importantly, looking at subscription video services for the full year segment EBITDA increased 11 per cent and was relatively stable in local currency, which includes the impact of $57 million of sports rights cough that would just said from last year the.
The business also generated meaningful free cash flow across the as increasing sky Eileen streaming is leading to improve financial momentum within the company and low of capital intensity.
The compensation cough.
Of course will also notably depressed and the pri each each of COVID-19 relationship savings initiatives.
As we previously communicated of much of the cost increase this quarter of where plant investments with some timing related items Dow Jones achieved the highest level of profitability since its acquisition. This fiscal year with margins expanding to nearly 20 per cent up almost 5 percentage points from the prior year.
[laughter] on and adjusted basis segment revenues and EBITDA for the quarter Rose 14 per cent and 12% respectively.
[laughter] at book publishing for the fourth quarter of Harper Collins post of 21 per cent revenue growth from the price and segment EBITDA Rose 2 per cent adjusted revenue screw 11 per cent and adjusted segment EBITDA was flat to the prior year the motivation and growth was impacted by the lapping of COVID-19 benefits and the Pri and mix of titles as lost.
Jeeze results included the Magnolia table for you into.
Despite the difficulty of comparison book consumption levels remain high fourth quarter continue to benefit from Richardson, but to a lesser extent and the prior quarter.
Well physical styles continued the momentum this quarter of digital revenues decline, 3% and the quarter, reflecting of difficult comparison to the prior year when many brick and mortar stores were closed you to COVID-19 April sales fell 11 per cent in the course of but will partly offset by 11% growth and download for <unk>.
These coaches result also include almost 2 months of results from the acquisition of the H and H books and media segment root for.
And I should about the acquisition and she'll very confident about achieving the cost and itchy target of $20 million with and cheese and the team actively exploring revenue opportunities, notably in licensing and animation.
Turning to news media revenue for the course of with $595 million up 21% and this is the pri driven by the recovery of the advertising market from COVID-19 related weaknesses and the prior year, griping circulation and subscription revenues and of $73 million and 14 per cent.
Positive impact from Fonsi currency fluctuations.
Greg was partially offset by $58 million or 12% negative impact from the divestiture of news American marketing in May of 2020.
On and adjusted basis revenue <unk> 21 per cent as we cycled the steep declines from COVID-19 lost Ya.
Circulation and subscription revenue rose, 26% driven by sushi full moon dollars or 15% benefit from currency fluctuations strohm digital paid subscribed the growth and cover price increases as well as the recovery of print volumes from COVID-19 related weakness and the prior year.
Advertising revenues increase the issue $1 million of 15% compared to the prime the benefiting from the COVID-19 comparison with strong guidance and both print and digital advertising revenues across key masters as well as the $29 million or 14 per cent increase from foreign currency and <unk>.
<unk> came despite of $58 million or 28% negative impact relationship the divestment of news American marketing and of $10 million or 5 per cent negative impact relation to the closure or transition to digital assertion regional and community newspapers and Australia.
Otter reported basis advertising revenues, and Australia rose, 34% of 14 per cent and local currency will use UK advertising revenues rose, 86% for 65 per cent and local currency in.
And the U S. The trends remains strong with the New York post posting 60% advertising revenue growth of which did you at the ties and grew 65 per cent.
[noise] segment EBITDA for the quarter was breakeven compared to a loss of $44 million in the prior year.
And the other segment fourth quarter results include non repairing legal settlement cough, excluding that charge cost of a modestly higher than we had expected primarily driven by high of equity compensation across both cash and non-cash expenditure.
I would now like to talk about some things for the upcoming quarter and fiscal 2022.
[laughter] visibility remains limited, especially in Australia due to ongoing COVID-19, Lockdowns that said, we are very encouraged by out of July trends and of looking to build on that momentum into for school 2022.
And digital real estate services as noted and they release revenue in fiscal 20 twenty-two will benefit from of price rise in July for <unk>, and they also and I should that new by listings declined 3 per cent and the month.
Results will also include the acquisition of mortgage choice. Please refer to Rei's press release for more days held.
And that move we continue to see strong pricing and agent to mom to spot ongoing supply constraints like the fourth of course off we expect the bell at 3 investments with revenue growth as we focus on expanding into Adjacencies.
And subscription video services, we are pleased with the ongoing performance of Teo and beans, and the efforts to improve broadcast offered we do expect of modest impact and the first quarter due to the current lockdown and Australia, particularly in commercial venues.
Pull the year, we expect coffee and local currency to be stable with fiscal 2021 and revenue trends to continue to improve as the streaming products continue to scale.
At Dow Jones overall trends across the business remain strong we expect cost to increase as we focus on top of lying growth, but we will remain focused on March and expansion Dow Jones will also see incremental content licensing revenue from Google.
And book publishing overall trends remain favorable despite lapping the benefits from COVID-19, what book publishing places of difficult comparison and given it to the school 2021 performance. We remained very encouraged by Harper Collins strong really slice and favorable secular trends. We also expect to see additional contribution from the acquisition.
Of Hyche and height.
That news media, we expect the segment to show a notable improvement in fiscal 2022, driven by the contributions from the deals with Google and Facebook, improving advertising trained and disciplined cough section.
Capex for the is expected to be approximately $100 million higher and fiscal 20, twenty-two partly driven by high of technology cough and the rollout of the I P and able to <unk> set top box at Fox till.
We will continue to manage spin closely throughout the as we did during fiscal 2021.
And finally free cash flow generation will remain of <unk> in the coming year.
The company and the stronger basic capitalized and with new life as of growth. We're excited about the potential for a recent acquisitions, including <unk> announcement. This week on Opus and as Robert mentioned, we and now actively reviewing a capital allocation policy and we look to balance reinvestment and growth with healthy shareholder returns.
And with that let me hand, it over to the operator for Q&A.
[noise]. Thank you if.
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Again, the <unk> to ask a question.
We'll pause for just a moment of <unk>, everyone and opportunity to signal for questions.
And we will take our first question from the line of Cain Honan of Goldman Sachs. Please go ahead.
<unk> 2 quick ones for me and quickly just for.
And I'm gonna come in and around the Boardwalk could you could go a little bit more detail around the central welcomed the what for quantum and torn and you should be thinking of Bill and then <unk> <unk>, 1 word and <unk> could you just hold them Norfolk, how we figured out and some style you'll be with your back or get into it for 22 and some of <unk> you mentioned too.
[noise] insurance on buybacks. So obviously you were indicating the more vigorous law of your discussion about couple of location for a dog, but we have more capital of dwell the coach given the strong cash generation and would come and go over the past year and for the foreseeable future of the acquisition of Arbus does not change the drinking or wishes and bronze stars. So.
Reiterate what we said earlier, we are actively reviewing a couple of of drugs policy with regard to focus on the <unk> Uhm I was for real real can really use out of very early stage of of exponential evolution of the growth of of the past year has come to spot the relative paucity of lifting so and the encouraging saw and as the level.
The of listings is on the rise of good and the immutable laws of supply and demand as or just the beginning to take effect of it is worth reiterating the we've grown faster than jello and truly of as measured independently for 7 day, except successes of months.
And in the past 8 months of that growth has exceeded 20 percentage points and that is of a profound transformation and shortly indicate so the fundamentals of 5 of them.
And can I interest you in relation to move as well as we sort of think about the coming of <unk>. Notwithstanding obviously market conditions, we do expect to see you and optimization on the coal Legion Uhm product moving into 2022, and we still see opportunities to improve sell through within that product in relation to the referral business. We expect to continue to benefit from <unk>.
<unk> Hi, I'm crosses you would optimization and will continue to focus on include the improving the clothes right overall agent demand remains very robust and existing home sales remained notably higher than pre COVID-19 levels. So we feel very confident.
Thank you can Valerie and we'll take our next question. Please.
Thank you if you find the 2 question has and answered you may remove yourself from the queue by pressing start too.
We're moving our next question and from the line of and 2 Rykowski of Credit Suisse. Please go ahead.
R Robert Hall, Susan kind.
How can I ask 1 on books and just the very quick 1 on office books.
Books, and the quarter you have very strong revenue growth, but uhm adjusted EBITDA was flat and ex you talk.
And talked about and it makes of puddles, but just wanted to understand and the and you 1 of cost factors driving niece and should we expect the actual real good so the future quotas and you could provide a small day tell that would be useful and then uhm with the odd disaggregation of announced the Lady Schwake do you see any potential synergies for them that transaction and.
And if you do can you talk to walk area of spectrum.
<unk> come from thank you.
And sure I might start uhm in relation to Harper Collins, So and I hope, there's not anything really the material and 1 off we have had for integration costs of the H M H, but they're not materially and the context of the overall results. It really will of down to just the makes the slightly low of digital sales the back with snakes with a little bit different 2 per cent differ.
And some quote unquote of year on year, but the consumption trends do remain favorable. So we are expecting to see the amendments and continue.
[noise] on the <unk> and your office was opportunistic it was a required style and we were able to act swiftly and decisively, but we do have a significant amount of expertise and got sector. Thanks for Dow Jones and the very clear sense of how we can develop the purpose of business, which is already high margin cash.
Generative and decidedly digital let me describe every year since 2007, the spot the Bourbon flow of energy cycles, and so it was the right out the art this will be and important source of ongoing revenue and profit and cash broke for the Jones and I'm you score of ritual the energy commodities renewables and calm and related products, which will have.
A long runway deep into the future.
Thank you and Joe Valerie we'll take our next question. Please.
Thank you we'll move on to the next question for the line of <unk> of Macquarie. Please go ahead.
[noise] <unk>. Thanks Bye for you Tom Uhm, just just the very quick question. The other also considering of ballpark Uhm could you give us a feel for almost a must be able to solve a couple of management and like all the sooner. The orcas acquisition Uhm, how would you think about the Liberals and homeless and will guy So it's gonna for Bliss.
[noise] book look Oh, darn I don't think we can give you any more details and then the which we have revealed to dry but.
And I just might clear the <unk> acquisition of itself is not affected.
Thinking on the couple of location and.
And we are in the for true a disposition of having more of capital dwell the code.
And the darn just to add to that I mean, I guess I mentioned, we we've got a healthy cash balance of about 2.2 billion at the end of the of the like this transaction will be it'll cash transaction. So we still will be retaining of healthy cash balance and having generated meaningful free cash flow. The Shia we are continuing to focus on free cash flow generation.
And as we move forward. So at this stage, we're fairly comfortable with 1 of balance sheet look funk.
Thank you Darren Valerie and we'll take our next question. Please.
Thank you and once again, if you'd like to ask a question and please press the star 1.
We will now take our next question.
From the line of Brian had of Morningstar. Please go ahead.
Real good you mentioned several times the Optionality, that's opening up for books too.
Can you please and liberate on what that means and when you make a decision which option you'll going to take.
And Susan you mentioned, the decline and capital of intensity for Fox pill.
And you should get the blood on the <unk> Catholics will change for books, too and and 22 compared to 1 of them. Thanks.
[noise] well.
Brought it is very clear that's what we have real foxtel of options and it's a tribute to the team and Australia who've tightly transformed the business and as for cheese. We've got the 2 sports rides long into the future of B as in the absolutely contemporary customer friendly screaming.
Platform network, and and those systems, Oh, and <unk> means of monetizing existing rights and our extra costs of we have a broadcast experience that is world class and is now, but really square for video and Australia.
And we surely have pricey lost the city and the market and if a large number of people in Australia understand that you pay a premium for premium content.
These are real special circumstances, and the confluence combined with the size of leadership from Patrick and the shovel and.
Has tried and swarmed Fox does for truth, and certainly given those choices.
And then just to follow on in relation to the Capex question. So the increasing investment next year is in relation to the I T..5 Bucks as I mentioned, which really is to focus on on page for that business going forward, which will drive efficiencies going forward. So wolf capex will be slightly elevation relative to the financially and it will then start to come down.
And even the forecastle financially you 22 is materially below the financial the 20 numbers.
Thank you Brian Valerie we'll take our next question. Please.
Thank you and we have a follow up question and from cane Honan of Goldman Sachs. Please go ahead.
And I got on there and you don't talking to since the picture on the grid and Facebook Uhm months' ago <unk> number the gist was there any of that and it says in the fourth quarter and then and then he'd come and check for you can make around the Dow Jones with news maybe.
The split of that number.
[noise], Okay, and the numbers are queue for actually pretty immaterial uhm. So we're expecting to say the full benefit of those deals come through into financially twenty-two we haven't actually given any guidance on the allocation. It's fair to say the bulk of the allocation is obviously kind of go across the dacha and segment and the news media segment and will will obviously be up.
The <unk> on that as we as we work through the year.
Thank you Jane Valerie and we'll take our next question. Please.
Once again, ladies and gentlemen, if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad.
[noise] it appears that the or no for the questions. At this time I'd like to try and the conference back to Mister for and for any additional or closing remarks.
Well, thank you Valerie and thank you for all participants day have a great day and as always we look forward to speaking with you all again and the very near future take care.
This concludes today's call. Thank you for your participation you may now disconnect.
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