Q3 2021 Endeavor Group Holdings Inc Earnings Call
[music].
Good afternoon, My name is Chris and I'll be your conference operator today.
At this time I would like to welcome everyone to the endeavor third quarter 2021 earnings call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session.
If you'd like to ask a question. During this time simply press Star then one on your telephone keypad and to withdraw your question. Please press star one again.
Thank you James Marsh Senior Vice President of Investor Relations you may begin.
Good afternoon, and welcome to Endeavour's third quarter 2021 earnings call a short while ago, we issued a press release, which you can do on our Investor Relations site Investor Dot endeavor co dot com a recording of this call will be also available via that site for at least 30 days.
Today, Youll hear from Endeavour's, CEO, Ariella manual and CFO, Jason Loveland before we open for questions.
Purpose of the call is to provide you with information regarding our third quarter 2021 performance. In addition to our financial outlook for the balance of the year.
I do want to remind everyone that the information discussed will include forward looking statements and projections that involve risks uncertainties and assumptions as described in the risk factors section of our filings with the security and Exchange Commission, including our 10 Qs.
These risks or uncertainties materialize or any assumptions prove incorrect our results may differ materially from those expressed or implied by such forward looking statements and projections.
Forward looking statements speak only as of the date. They are made and we undertake no obligation to update them publicly in light of new information or future events, except as legally required or.
Our commentary today will also include non-GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating ongoing operating results and trends.
These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued today as well as on our IR site with that I'll hand, it over to Ari.
Thanks James.
Continuing our positive momentum from last quarter, we once again surpassed our quarterly revenue and adjusted EBIT targets.
Given the outperformance and our positive outlook for the balance of the year we.
We are also range.
We've also raised our full year outlook, which Jason will discuss in more detail shortly.
Before he does I.
I want to discuss three important things.
You're seeing record performance year to date.
The continuation of pent up demand for entertainment.
And the attractive prospects of sports betting.
UFC posted its best nine month year to date period, and the 28 year history in terms of revenue and adjusted EBITDA and this despite lower event output in the third quarter versus third quarter 2020.
During the third quarter, you will see sold out all three pay per view events.
And UFC 264 became the third highest grossing event and UFC history.
Good revenues at all events was enhanced by our own VIP experience offering from a location that puts fan and the center of the action.
While commercial pay per view.
The highest worldwide grossing revenue quarter since the pandemic began driven in large part by the many U S restaurants, and bars, starting to open and full capacity.
Sure.
We also saw strong performances across our consumer products and licensing and sponsorship categories.
Youre UFC sponsorship revenue is up 59% compared to third quarter 2019, the last non COVID-19 impacted here.
We're seeing similar sponsorship increases across the balance of our owned and operated sports and events portfolio.
In terms of international Media rights, we've closed nine new deals throughout Asia Pacific during the period, if you combine the nine with the prior five international rights deals we discussed last quarter.
The aggregate average annual value is up more than 80% over the prior deals.
Beyond the UFC.
Our businesses continued to benefit from the pent up demand for entertainment created by the pandemic.
While reopening rates continue to vary geographically we.
We are seeing increased activity across all lines of our business linear.
Linear and digital platforms are in a race for more content, creating an uptick in TV and film productions.
Meanwhile, our talent representation business, excluding music and theater is up double digits this quarter versus third quarter 2019.
And we have room.
For more optimism as broad rate recently reopened and music artist community multiyear tours in large venues.
On the sports side bands are filling stadiums and sponsors are eager to spend dollars to reach those fans and make up for lost time.
If you look at Super Bowl 56 ticket sales from our location.
They are pacing meaningfully ahead of 2019 sales for Super Bowl 54.
The average ticket price is up over 50% on a like for like basis.
Now turning to sports betting a fast growing complement to sports media rights and live events.
The combination of the Pandemics role.
As a catalyst for online sports betting.
The increased betting legalization among U S states.
And the opening of new territories globally has laid the foundation for further growth of our IMG Arena and soon to include opened <unk> sports betting business.
As it currently stands IMG arena as part of our events experiencing right segment upon closing.
Of our open bed acquisition.
Which we announced at the end of the third quarter, and which is expected to close in the first half of 'twenty two 'twenty two.
I am Purina and open that will combine to form a fourth operating segment.
This will create greater transparency and enable us to better focus on this growing business.
<unk> is already a major global player in the sports betting market, serving more than 470 sports book brands by supplying data and video feeds from rights holders, including PGA tour, UFC ATP and MLS.
Layering an open bidding engine.
Which processed nearly 3 billion bets in 2020.
And it's modular suite of content offerings with IMG arenas feeds and virtual products.
We will create a unique end to end solution for sports books and rights holders.
It's a fully integrated tech solution combined with our fan first approach to content are completely turnkey solution that we can take to existing rights holders within our broader media business are also making us more attractive to prospective clients.
We expect this integrated offering will help rightholders drive increased fan engagement and new monetization opportunities in turn increasing the sports betting handle.
As I mentioned, while we don't anticipate the acquisition to close until sometime in the first half of 2022.
We've already received a high level of interest interest from sports books and rights holders around the combined entity and we are extremely encouraged by the growth opportunity ahead, and with that I'll turn it over to Jason.
Thanks, Larry and good afternoon, everyone.
Yeah.
Before I get to our revised guidance I'll start by walking you through our financial results for the quarter and providing you with some additional color around what we're seeing in each of our segments.
Any comparisons I give will be in reference to last year, which was impacted by COVID-19.
For the quarter ended September 32021, we generated.
Approximately $1 4 billion in consolidated revenue up $526 8 million or 69% over the prior year period.
Adjusted EBITDA for the quarter was approximately $283 3 million up $105 million or <unk> 58, 9%.
Our own towards property segment generated revenue of $288 5 million in the quarter. This segment is down $10 $6 million in revenue in comparison to the prior year quarter.
This is attributable in part to a $25 million contract termination fee recognized in the third quarter of 2020 that did not recur in 2021.
It is also due to more events being held in Q3 of 2020 as a result of events shifting from Q2 due to COVID-19.
The revenue decline was partially offset by <unk> continued strong growth across live events.
Residential and commercial pay per view consumer product licensing.
And sponsorship as well as additional PBR events held in the quarter. The segment's adjusted EBITDA was $134 7 million.
<unk> posted its best nine months year to date period of Q3 in terms of revenue and adjusted EBITDA.
Outside of its strong live event in pay per view performance, we signed several new licensing and sponsorship deals. These included a partnership with icon meals.
<unk> ready made meals company and multiyear sponsorships with Battle Motors and defer critter.
Internationally as already mentioned, we also secured nine new media rights deals in Asia Pacific significantly increasing our distribution throughout the region.
Meanwhile, live events on the ESPN at ESPN, plus continue to perform well with viewership up across platforms. The return of the ultimate fighter also approved a tremendous success.
Viewership on ESPN plus indicate the season performed better than the last three seasons that aired on Fox sports one.
On the fan engagement front.
<unk> continues to have one of the most engaged follow our basic among all major U S sports.
Social followers grew over 40% and Youtube subscribers grew over 30% year over year.
Lastly in this segment.
<unk> also continued its positive momentum.
Taking us right past streaming service to Pluto TV, bringing its linear and streaming content all under the Viacom CBS umbrella the COO.
<unk> also signed several new national partnership and licensing deals in the quarter and launched its first <unk> last month.
Now turning to event experiences in rates.
This segment recorded revenue of $446 3 million, an increase of $62 1 million or 16, 2% year over year.
The increase was primarily driven by greater events. Some production revenue attributable to the return of live events in 2020, one as well as the addition of the recently acquired and CSA.
This was partially offset by a decrease in media rights revenues, primarily due to the return to our normal schedule of European soccer matches in the quarter and the expiration of two European software contracts in the second quarter of 2021.
Adjusted EBITDA improved $94 6 million to $85 million compared to the third quarter of 2020.
This was primarily driven by the growth in revenue and a decrease in direct operating costs.
To give you a little color on the activity were seeing in this segment.
There were several major sporting events during the quarter in which we endeavor flywheel with unfold this way.
The first was Wimbledon.
A relationship that dates back over 50 years IMG produced the events official television and radio channels showed determine endophyte on its sports 24 channel secured 80% of its official partnerships and broker deal to launch a commemorative in ft.
At the open Golf Championship IMG served as our host broadcaster and the official commercial representative for the events show the event on score 24 and ran hospitality.
Meanwhile, our experiential marketing agency <unk> Silver 90 created determined spectator village.
And lastly at September as Ryder Cup on location handled all consumer travel at ticket exchange program for the event.
One six over 90 operated consumer experiences and hospitality programs across the event footprint.
IMG arena packaged and delivered all official event data for sports book operators via its golf event Center and 424 carry the event in flight.
Meanwhile, dozens of clients computed across all three events, including Novak Djokovic, who claimed amend single title at Wimbledon, While Patrick Kelly and Jordan Suite helped power the U S to a win at the Ryder Cup.
Across the rest of our event portfolio.
We held one of the largest new York fashion week ever in several of our European festivals hit milestones.
The Big Festival celebrated its 10th anniversary with 50000 attendees. The Hampton Court Palace Music Festival welcomed 30000 deserves on its 25th anniversary.
And tissue Paris saw a record 32000 guests attend the biggest food festival in France.
And lastly, freeze London return with its first in person event since 2019.
Moving onto our representation segment.
Revenue was $664 7 million, an increase of $481 $1 million over the prior year period with some both production and touring events come to a halt due to COVID-19.
Growth in this segment was primarily attributed to a significant increase in endeavor content project deliveries.
And client commissions and marketing and experiential activations.
Endeavor content deliveries included Ccs into Apple TV nine perfect strangers to Hulu in the U S and Amazon internationally.
The final four episodes each of truth be told to Apple TV and the wall season four to NBC.
As well as Doc you Terry Mccartney 3212.
Last quarter, we referenced that endeavor content revenues were impacted by a shift in content deliveries into Q3, which subsequently had a positive impact on this quarter.
Adjusted EBITDA for the quarter was $141 8 million, an increase of $100 1 million, primarily driven by the growth in revenue.
As mentioned last quarter, we continue to pace ahead on WMA bookings for the second half of the year.
Concert to resumed in the quarter <unk> had five or six top doors and seven headliners at Lollapalooza and Bonnaroo festivals.
On the film front the agency was behind summer blockbusters, such as Cruella jungle cruise a quiet place two as Shang Chi the latter of which became the top grossing film of the pandemic era in North America.
On the sports side more than 50 clients competed in the Tokyo Olympics, and nearly 20 broadcast clients covered it.
While the men's women's and Juniors U S. Open singles titles were all one by clients.
We also continued signing stars like Dallas Mavericks, glucagon check while pushing further into Nio representation funding a number of Covid your basketball players.
On the brand side IMT licensing was named best licensing agency for its work with Goodyear and also launched a number of new product lines or behalf of talent and brands, including Shinola, Dolly Parton, Fortnite, Ducati Jeep and Aston Martin.
Meanwhile, one six over 90 continued gaining steam with its brand clients looking to activate at major sporting events with increased sand capacities.
At the summer Olympic Games, the agency worked with several official partners, including managing the athlete relationships for team visa and team Coca Cola.
Finally in this segment, we shared last quarter that we had initiated the sales process for a portion of endeavor content.
As a reminder, our plan is to divest the required portion of the WJ restricted business and retained the nonrestricted businesses.
We continue to have positive conversations and are very bullish.
We've narrowed down to a short with the potential buyers and we'll let you know when we have more to share on that front.
The updated guidance I will share shortly assumes endeavor content is status quo for the balance of the year.
Now before I discuss guidance I do want to briefly touch on our capital structure.
Q2, we paid down a portion of that under both the WMA IMG and UFC credit facilities.
And in October we raised $600 million of debt under our UFC facility.
We remain focused on strengthening our balance sheet and are on track to achieve our sub four time leverage target.
Now onto our updated guidance for the full year 2021.
As we've said before and will continue to say, we believe looking at our business on an annual basis is the best way to view it given the quarterly fluctuations related to timing of events.
A business transactions on behalf of our clients and timing of content deliveries.
As already mentioned earlier, we've been pleased with the pace of reopening which has led to an uptick in production and increase attendance at events. We of course continue to monitor vaccination rates and variance globally and plan for any potential impact as it currently stands we remain generally positive on our outlook for the remainder of the year and into next.
We are therefore, once again raising our revenue guidance from a prior range of between four eight and $4 85 billion to now between $4 89, and $4 95 billion.
And on adjusted EBITDA, we have raised the range from 765 to 775 million <unk>.
To between 835 and $845 million.
At the midpoint this implies and over 17% margin also in excess of our previous expectations with that I'll turn it back over to James.
Great Chris can we take the first question. Please.
Absolutely and just as a reminder, if you would like to ask a question star one on your telephone keypad and our first question is from Ben Swinburne with Morgan Stanley. Your line is open.
Hey, good afternoon everybody.
I have two questions maybe Ari on sports betting one question I've gotten from investors since you announced the open that acquisition is why did these businesses makes sense add endeavor was it that you guys bring to the sports betting.
Business.
From a platform point of view that can make these assets more valuable at endeavor than they would be elsewhere in the ecosystem, particularly under sort of pure play sports betting companies. So maybe you could talk about what you've done with arena and.
What you think you can do when you bring open bed in.
And then <unk>.
If forex on the call I think he is just on the UFC.
There's obviously a number of years left before the ESPN deal is up.
But I'm wondering what you guys have done and will continue to do to try to enhance the value of those rights with your partner.
Including adding new content or expanding the rights and distribution, making the business bigger whenever you guys think is possible or that you've worked on to help us understand what you can do to make sure that that business is as valuable as possible to you partner one when the deal does come up down the line.
Thank you Joe.
First of all I'll answer the second part first.
Bob Chapek mentioned on his call.
The driver for ESPN plus was actually the UFC.
And I can go into a lot of drivers that we think are going to add value to the UFC on a go forward basis, but he he <unk> himself kind of mentioned the value of the UFC to drive subs, which I think is an indication of the value proposition. In addition to that they have added fight path. We have now the contenders here.
We have local contender series, so I think it's a the programming.
Length and depth that we have at ESPN is pretty significant meaning that I think we're kind of pretty valuable to them and that growth of that platform for ESPN.
If you want later on I can go into growth drivers for the UFC and as it relates to sports betting we have a completely different approach to sports betting you know our footprint as it relates to our representation of sports rights on a global basis, we represent 150 <unk> and.
160 territories different from our competitors were just in the sports betting business and right now in the marketplace sports betting is a complete compliment to the sports.
Fueling.
Experience and a complement to it that is required and if you see it on ESPN or any of the other platforms actually crucial to that and with our understanding of where sports.
Our going meaning the rights for sports are gone when you add that plus our other elements that we bring to the table, which differentiates ourselves, meaning the production business and the distribution business plus the sports betting. It's a unique offering that nobody else can can bring to the table, which enables us to get a view when you go to a league and.
We offer all of those segments.
You have a unique opportunity for them internationally and when you combined.
Arena with open back.
I think our number was revenue synergies of a.
Significant amount I won't go into a specific number but it's a large number and we own the data and the feed on arena they own all the content the player wallets.
Integrity et cetera, it's a one of a kind offering that nobody else has in the marketplace. So I think that's why between what we have in IMG IMG Arena and I think we're in a unique situation.
Thanks, Alright, that's helpful.
Thanks, Ben Operator next question please.
Our next question is from Alexia <unk> with Jpmorgan. Your line is open.
Hi, Thank you very much two questions if I may.
Zhang.
I guess, what's embedded in your Q4 forecast and then how we should think about 2022 and at this point what percentage of your portfolio do you think can operate without any restriction and then Aman our endeavor content I guess can you discuss your long term outlook is EBIT unscripted Pete debit content.
Keith you're keeping and with the sale of the scripted side eventually I guess, what kind of will you'll have at the 20% partner.
Thank you.
Yes, I'll take the first part of that question, then I'll handover already for the second question as far as of Ensco.
We're very we feel very good about our events in our portfolio coming back as already mentioned and as I mentioned in our prepared remarks, we see some great <unk>.
So great ticket sales in Q3, we've seen Super Bowl tickets on a like for like basis be up over 50% year over year are.
Good Q3 with events like big feasible and safe the Paris as well.
All of our UFC pay per view events year to date have been sellout, so really strong performance on our events across the board.
As far as Q4, some of our larger events in Q4, we have winter Wonderland, which is launching next week in Hyde Park, Miss Universe, as well as free of London. So those are some of our bigger events that are taking place in Q4 on the cancellation of our timing side, we're still seeing some on some areas geographically, particularly in China, where chart where R. W. <unk>.
<unk> has been cancelled as well as the Buick LP LPGA, so I'm stoked for some geographies around the world, we're seeing some impacting to our events, but overall.
We also see music coming back and Broadway reopening so going into 'twenty, two we feel very good about the momentum behind our event business and returning to.
Pretty much as close to a full event calendar we've had in some time given that certain geographies around the world, we still have some limitations.
Okay.
And then as it relates to E C.
We will sell the restricted portion of the of the scripted side movies and TV on the non scripted side, we have a very active business now in EC will continue to have a very active business. We won't model. It out right now, but we are very successful in that advisory business non scripted.
Documentary space and will continue to be and we see the demand from the streamers the linear players only increasing the.
The mix.
So that's going to be a very good business for us and it continues to be a good business for us.
Thank you.
Thanks, a lot our next question.
Our next question is from Stephen <unk> with Goldman Sachs. Your line is open.
Great. Thank you one for Ari or Mark on location last quarter, you signed a pretty sizable deal with the Olympics could you talk about what other opportunities, especially ones that are of similar size do you think on location could go after in the next year or so to continue to grow that hospitality platform and then one for Jason you mentioned endeavor is in the process of selling and Debra.
Content like we just spoke about as well as breaking out the sports betting business into a separate segment could you speak to what investors could expect to see in the remaining parts of the event experiences in rates and a representation segment once that take place once that takes place maybe in terms of revenue growth or margin profile I think that would be helpful. Thank you.
So on the AD location.
I really can't comment on specifics around future business.
There is a ton of growth opportunities.
Out there for US I also just want to remind you that is not just the professional sports.
Platform that we see.
We have massive.
Travel hospitality business in that space and beyond sports.
And location comes.
It comes across fashion music entertainment more broadly so we will continue to see us looking for opportunities in these areas of business, given where we sit at the center of that on a global basis. So yes. They are sports opportunities, but also it's in all those different areas also where we sit.
Yes.
Yes as far as the segments go post closing as we've said for open that we expect to move the IMG arena out of the year EUR segment, creating a new sports betting segment.
That should provide increased transparency to help evaluate our sports betting business, but given the high quality of our assets our remaining EUR on our businesses, including on location in our performance business as well as owned and operated events such as Miami Open we continue to be very bullish on our revenue outlook and our EBITDA growth potential in that segment and as I look through it.
To representation.
As we said we're going to be selling the restricted portion of the EC will move out we will still have the remaining EC business. The non scripted film sales financing and consulting services in this segment.
We do think that once the restricted portion of the EC are thrilled we would expect to see margin improve for this segment overall and also we think the representation segment. This segment should be simpler to evaluate with the challenges of determining production and episodic delivery timing in this segment.
Great Thanks for that.
Our next question is from David Joyce with Barclays. Your line is open.
Okay.
Thank you a couple of questions. Please first if you could please break out how much revenue and EBITDA in the quarter came from acquisitions.
Secondly, on those new Asian distribution deals for you I'll see if you could provide some more color on those I appreciate that.
No the comment that the recent announcements aggregate to 80% increase in rates revenue, but how much of these are incremental distributors or incremental footprint.
Incremental rights and.
Whats.
What's on the horizon for more renewals. Thanks.
So on the 81.
Over 80% at same geography, new distributors so <unk>.
Instead of just being one theres multiple and therefore will have actually bigger audience.
And so it's over 80% with the current nine and and and and then last quarter I mentioned five new ones. So a significant increase in.
In our international Economics.
Yes, and as far as the revenue and EBITDA associated with the acquisitions.
If there are embedded in our segments that they're representative we're not specifically calling those out.
Alright, thank you.
Great. Thank you David.
Our next question from Jason Bazinet with Citi. Your line is open.
Thanks, I just had two balance sheet questions.
One I guess your cash balance came in a lot higher than I was expecting and I think it's because we had maybe a $400 million usage of cash.
To find the balance of UFC. So I just wanted to make sure that that.
Yet to occur sort of later this year next year. If you can just provide some color there and then second I was surprised how big the assets and liabilities are.
Assets held for sale related to endeavor content can you provide just a little bit of color.
All of that just content.
On the first part what we are we have positive positive working capital in Q3. This year, so far as far as our cash balance goes.
We are done with.
The acquisition of the UFC. So there is no more to be done there and then as far as the asset held for sale, yes, there's been a lot of a lot of production. The vast majority of that production in the buildup of those content assets until we actually make delivery of that.
That content.
Okay. Thank you.
Our next question is from Meghan Durkin with credit Suisse. Your line is open.
Yes, Thanks, I wanted to ask about the sponsorship growth opportunity. It Youll see you talked about the growth versus 2019.
I wanted to see what is driving that really is it new categories is it pricing I think.
The ship's been pretty hot lately, so and then what product categories are still out there to be tapped at USC and then on the open that acquisition what are the biggest hurdles ahead for the closing and then integration of the business and then how soon do you expect to see that business start to really scale.
So as I said.
On the sponsorship revenues are up 59% compared to Q3 dollars 19, and non COVID-19 year.
So we continue to sign and renew large multiyear deals draft Kings cryptic Monster, we've opened up new categories as Jason mentioned icon, Neil ZIP recruiter Battle Motors.
Auto in QRS are categories that we're going after a fairly significantly.
We're feeling good about that.
And each one of our.
Ones that are coming up we're getting significant increases in the current sponsors that are getting renewed and I think that's an indication of the power of the sport and the brand.
That exist now in the marketplace.
As far as open Becos.
No, we don't see any hurdles, except normal regulatory approval and the timing.
Get that done.
And what we're doing some pre integration planning whatever wherever we can at this point, but as far as when we actually close the transaction, we expect to integrate as quickly as possible and try to get all of the revenue synergies.
So we will be doing as much as we can pre integration and be ready to hit the ground running as soon as we close.
Okay great.
Our next question is from rich Greenfield with <unk> partners. Your line is open.
Hey, Thanks for taking the question I've got one.
One big picture, and then sort of a housekeeping point for Jason but already I guess from a really high level. It seems like the one of the final nails in the regional sports network coffin with sort of drill down today bye.
Dish into the whole Sinclair situation, but it seems like all of the leagues people that you know really well your whole company knows well in terms of baseball.
Paul and hockey all needed solution for their streaming future.
Hoping like is there a I mean clearly they are looking for new partners and configure their way out of a very difficult situation.
Sort of the local media rights that go well beyond cable networks Im just high level is there an opportunity for endeavor what role could you play what do you think happens and then just a quick follow up for Jason on housekeeping in terms of.
I think one of the things you mentioned.
The better than expected performance. This quarter was strength out of endeavor content. I was just wondering if you could size for us how much in the quarter or year to date on EBITDA basis revenue basis, what could you tell us about the business. That's obviously, leaving the company at some point over the coming year. Thanks.
Well I mean, I would say the following.
I think there will be a solution either though on the local level go direct.
If the.
If the situation doesn't rectify itself with the RSM.
And or one of the majors, who will step in none of these guys are not going to be in the local markets.
I do think this is <unk>.
For those leads.
It's going to impact them, but there will be a solution either somebody is going to figure.
Figure out the RSM situation.
And then over the top basis on a local level I don't really have a solid there has not our that's not an area that we're going to play in.
So no that's not an opportunity for us.
Okay.
As far as never content goes we're not we're not going to break out what the revenue was there, but we did mentioned at the end of Q2 going into three about revenue shifting from Q2 into Q3. So we had a pretty big Q3, as we've also outlined by a bunch of outlining a bunch of the deliveries we've made in Q3 so.
And we've also noted about.
The scripted part of that business on a margin basis being tip.
Typical studio margin so.
Obviously, that's contributed some EBITDA in the quarter, but.
Overall, we're happy with the results.
The segment for the quarter and a different content.
Thanks, so much ray.
Next question operator.
Our next question is from Conor Murphy with Deutsche Bank. Your line is open.
Hey, How're you doing so I guess the one question I had was the Hollywood production crew members just approved a new contract that would limit hours et cetera, and I guess just wondering.
You had any thoughts on if you would simply impact.
Length of delivering content.
And how.
Impacted industry going forward.
Can you repeat the question that came in and out at the beginning so I really didn't hear that this is our I am sorry.
And so.
So I just see the hydro production crew members just approve their new contract I think limiting some hours and I was just wondering how you think that might impact the delivery of content over time.
String out how long it takes to get production done et cetera.
No I mean, I think it's going to be fine they approve the contract.
I don't think theres going to be any disruption.
Alright, Thanks Connor.
Good afternoon for everyone else.
We have no further questions at this time.
Great. Thanks, everybody. Thanks for joining us here any follow up questions reach out thank you.
Ladies.
And gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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Okay.
Okay.
Okay.