Q3 2022 Fox Corp Earnings Call

May 10, 2022

Yes.

[music].

Ladies and gentlemen, thank you for standing by welcome to the Fox Corporation third quarter 2022 earnings Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session.

I would like to emphasize that.

That functionality for the question and answer queue will be given at that time. If you should require assistance during the call. Please press Star then zero as a reminder, this conference call is being recorded I will now turn the conference over to our Chief Investor Relations Officer, Mr. Joe <unk>. Please go ahead Sir.

Thank you operator good morning.

And welcome to our fiscal 2022 third quarter earnings call joining.

Joining me on the call today are Lachlan Murdoch Executive Chair and Chief Executive Officer, John Allen, Chief Operating Officer, and Steve Tomsic, Our Chief Financial Officer.

First Lachlan and Steve will give some prepared remarks on the most recent quarter and then we'll take questions from the investment community.

Please note that this call may include forward looking statements regarding Fox Corporation's financial performance and 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 Companys SEC filings. Additionally.

Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA or EBITDA as we referred to it on this call reconciliations of non-GAAP financial measures are included in our earnings release, and our SEC filings, which are available in the Investor Relations section of our website and with that I'm pleased to turn the call over to Lachlan.

Thanks, Joe and good morning, everyone. Thank you for joining us on this call.

I don't know about everyone else, but I often find early mornings after a coffee or two or three to be a good time to reflect on the progress you are making and to plan the days or weeks ahead.

Sitting here on the Fox a lot with my colleagues I can recall, our Investor day. When we saw all of you or most of you in person and kicked off the new Fox now already a few years ago.

Some of you asked then correctly could the new streamline Fox aggressively grow its top line revenues.

And while we committed to you then that we would add a $1 billion of TV distribution revenue by calendar 'twenty. Two we all knew the proof will be in the pudding.

So it's pleasing that this quarter, we again delivered healthy distribution and advertising revenue growth across our brands and complemented by further stellar growth at <unk>.

Overall, we delivered 7% revenue growth led by 9% advertising growth and 5% growth in our distribution revenues.

As a reminder, this 5% growth in distribution revenues does not include the benefit of any material renewals this fiscal year.

Those renewals start next year.

And our advertising growth was notably broad based.

Cable advertising grew by 20% in the quarter. This growth was driven by Fox news as it pricing and ratings strength more than offset the elevated level of preemption due to the coverage of the war in Ukraine.

Television advertising grew by 6% in the quarter.

This increase was led by <unk>, which saw its advertising growth accelerate from approximately 40% in the December quarter to 50% on the back of increased engagement.

In addition continued strong demand for sports drove overall growth at the Fox network and at the local level advertising revenues increased despite continued supply chain and other economic headwinds.

As we look to our upfront next Monday, we are encouraged by the early momentum in the market and we believe that our focus on lives, including the must have events of the coming year, such as the Super Bowl The World Cup and even the mid term.

Political cycle puts us firmly in the lead with our advertising partners as upfront deals were made.

And as we established last year <unk> will continue to play a leading integrated role in our upfront efforts.

We are in this enviable position due to the execution of our strategy by our core business units.

It's hard work, but it pays off.

Fox News channel finished the first quarter of calendar 'twenty two as cables most watched network in primetime in total day viewers.

In fact, Fox news was the only cable news network to post gains versus the prior year quarter in total viewers and the key demographic of adults 25 to 54.

Fox News and know beat CNN and MSNBC combined in total day and with both total viewers in the key demo for nine consecutive months and with a total they share a 54% across both demos.

These achievements reflect the growing breadth and depth of our programming slate.

Notably the five was the most watched program in cable news for the second <unk> consecutive quarter.

Meanwhile, gutfeld delivered its highest rated quarter ever while Jessie waters Primetime, which launched in late January is averaging over 3 million viewers in the seven P. M time slot.

Broadcasting 97 of the top 100, most watched cable news telecast this past quarter Fox news continues to attract the most politically diverse audience in its peer group watched by more Democrats, and independents, and MSNBC and CNN and total day and prime time.

Meanwhile, our sustained and disciplined investment continued to drive subscriber growth and engagement at Fox nation.

The Fox nation subscriber base has more than tripled in less than 18 months driving engagement levels to new heights in each quarter.

The avid Fox news fans have clearly embraced the Fox nation platform as demonstrated by its consistently high conversion rate of trials to paid subscribers and retention rates well above industry averages.

Momentum also continued at Fox weather.

<unk> benefited from expanded distribution on Roku, Youtube TV and Amazon, resulting in sequential growth in total view time across each month of the quarter.

At Fox Sports the Usfl is off to an encouraging start.

Through the first three weeks nearly 20 million people have watched the usfl on television and games on Fox and NBC are averaging one 5 million viewers.

That compares favorably to well established spring sports properties like the NHL formula one the EPL and MLS all properties, which either recently earned sizable rights increases are expected to do so soon.

We are clearly establishing the Usfl belongs in this competitive set which is our primary goal in this first season.

At the NFL, we are pleased to announce that we've reached agreement to carrying an incremental game this coming year on Christmas day.

As a reminder, last year's Christmas day game on Fox delivered over 28 million viewers.

We look forward to the release of the full NFL schedule expected later this week.

Elsewhere, our NASCAR season is off to a strong start.

Though early.

Low teens gains we are seeing in viewership would represent one of the more meaningful single seat and improvements across the 22 year history of NASCAR on Fox.

And we couldnt be more excited about the upcoming 2022 FIFA World Cup on Fox sports with the qualifications of the U S men's team and has blockbuster match against England on Friday November 25.

This match will contribute to an unprecedented Thanksgiving weekend of sports on Fox Bookended by the Dallas Cowboys on Thanksgiving day, and the Michigan, Ohio State rivalry on Saturday.

That's likely to add up to the most watched NFL game of the regular season. The most loss U S men's national soccer team match ever and the most watched college football game of the season, all during the busiest consumer shopping weekend of the year.

This speaks to the power of our platforms and the prudence of our strategy.

Of course, our linear businesses are complemented by <unk>, where total view time increased 50% propelled by record quarterly viewership.

In fact, two we delivered 18 of its top 20 TVT days in our history this past quarter.

A period, where there is traditionally some softer seasonality and the bond market.

Meanwhile to be expanded its industry, leading library and now counts more than 42000 titles in this portfolio.

Importantly, too we also renewed key distribution deals, including its Amazon partnership and signed its first custom deal for Samsung's Smart Tvs.

In the third quarter, we continued to invest in the future of <unk>, which we believe will be a strong growth engine for the company for years to come.

We have also invested in Fox weather, which is now available ubiquitously and every broadband home across the country and provides our clients with a new very broad advertising platform.

And finally Fox nation goes from strength to strength as it builds upon the engagement between Fox news and our most ardent fans.

These initiatives illustrate the entrepreneurial nature of Fox and dad with America's strongest media brands and most enviable balance sheet.

Before handing over to Steve I would just like to acknowledge the incredible bravery.

Sacrifice and professionalism of the entire Fox news reporting team and covering the war in Ukraine.

Journalism is rarely easy.

And often it is very hard.

Bearing light on the horrors of this war and the resulting refugee in humanitarian crisis. It is born is probably the hardest assignment we can give.

I am we all are deeply grateful for the tremendous work and extraordinary journalism that <unk>, Jennifer Griffin, Steve Harrigan, Jeff Pellekar, Ben Hall, and many more excellent reporters have have provided our audience.

Tragically two of our journalists were killed and Keith.

And Ben Hall remains on treatment for a serious injuries.

Our thoughts and the thoughts of the whole Fox family are with them and their families.

With that I'll hand over to Steve.

Thank you Lawson and good morning, everyone.

Our third quarter results once again reflect the strength of our leadership brands and the continued growth of our digital businesses, where we achieved total company revenue growth of 7% year over year.

Delivering top line growth across all of our operating segments for a fourth consecutive quarter.

Total company affiliate revenues increased 5%. Despite the fact that only 5% of our total company distribution reviews have been up for renewal this fiscal year.

Meanwhile, the rate of industry subscriber declines remained steady in the quarter with trailing 12 months sub losses running below 5%.

Total company advertising revenues grew 9% as our leadership brands once again delivered premium pricing coupled with continued strong momentum in <unk>.

Quarterly adjusted EBITDA was $811 million down 10% over the comparative period last year as the revenue growth was more than offset by higher expenses.

As we foreshadowed on prior calls the increase in expenses was mainly driven by the anticipated increase in digital investments, including Fox News media and <unk>.

Additionally, we saw high programming rights amortization and production costs at Fox Sports and were impacted by an approximately $30 million write down of certain scripted programming at Fox Entertainment.

Net income attributable to stockholders of $283 million or <unk> 50 per share compared to the $567 million or 96 per share we reported in the prior year quarter.

As we've seen in recent quarters as below the line variance was primarily due to the change in fair value of the Companys investment in <unk>, which we recognized in other net.

Excluding this impact and other noncore items adjusted EPS was <unk> 81 per share compared to last year's 88.

Primarily reflecting the movement in EBITDA.

Now, let's turn to our business segment results, starting with cable networks, which reported an 8% increase in revenues.

The strong revenue delivery was underpinned by significant gains in cable advertising revenues, which grew 20% in the quarter.

Notwithstanding slightly higher levels of preemption is associated with our breaking news coverage of the war in Ukraine Fox News was the engine of this advertising revenue growth with strong gains in both audience and pricing.

Cable affiliate revenues increased 3% over the prior year period as a result of healthy pricing gains across all of our networks.

Cable other revenues increased 23% led by the timing of sports sub licensing revenues, which were impacted impacted by Covid last year as well as continued subscription momentum at Fox nation.

This growth was partially offset by the disposition of our sports marketing businesses, which was sold in March of last year.

EBITDA at our cable segment increased by $48 million over the prior year period. As these revenue increases were partially offset by higher expenses related to the digital the digital investments at Fox News media.

And the timing of programming amortization and production costs at the cable sports networks. Following the COVID-19 related disruptions in the prior year.

Almost matching the strong revenue growth in cable TV segment delivered a 7% increase in revenues.

This was led by an 8% increase in television affiliate revenues over the prior year quarter, reflecting increases for both our direct retransmission revenues at our owned and operated station.

And for our programming fees from non owned station affiliates.

This run rate over to assure the achievement of that target of $1 billion of incremental TV affiliate revenue. This calendar year that we announced at our Investor day back in 2019.

Our television segment also delivered 6% advertising revenue growth, reflecting strong linear pricing at the Fox network and continued growth at <unk>, partially offset by lower impressions and Fox Entertainment.

At Fox sports the impact of the additional week to the NFL regular season was offset by the absence of the rotating NFL NFL divisional playoff game this year.

And at the Fox television stations.

Notwithstanding the ongoing supply chain related challenges to the auto category. We continued to grow advertising revenues supported by gains from our digital sales efforts and continued demand from the sports betting category.

Other revenues at our television segment increased 17%, primarily due to the impact of the acquisitions of modest strength attainment, and TMZ and the consolidation of our stake in studio Ramsey Global.

TV EBITDA was lower by $100 million against the prior year period as it is healthy revenue growth was more than offset by the planned digitally investment to the highest sports programming amortization and production costs at Fox sports and in approximately $30 million write down of certain scripted programming at Fox Entertainment.

Turning now to cash flow, we generated strong free cash flow of $154 billion in the quarter, reflecting our normal seasonal cycle of collecting advertising revenues from a full programming and the result of our sports rights payments being concentrated in the first half of the fiscal year.

Our share repurchases since the commencement of the quarter totaled $300 million.

In fiscal year to date, we have now returned over $1 billion of capital to shareholders.

This is comprised of approximately $275 million in the form of a semi annual dividend payments.

And a further $800 million in share buybacks.

We remain committed to easily utilizing a full buyback authorization of $4 billion and have now cumulatively repurchased approximately $2 4 billion.

Representing over 11% of our total shares outstanding since the launch of the buyback program in November 2019.

We.

To maintain a very strong balance sheet, ending the quarter with $4 6 million in cash and $7 2 billion in debt.

So as we look forward to set up for fiscal 2023 remains incredibly strong with the financial tailwind from Super Bowl 57, the early exit of Thursday night football.

November's midterm elections, and the start of our next major distribution renewal cycle.

So with that I'll now turn the call back to Loveland.

Thank you very much.

Steve.

As you know we usually after steves comments, we go straight to Joe <unk>.

<unk> and straight to questions but.

We have breaking news, which I'll come in.

In the spirit of being.

Always.

Open.

And giving our investors and our shareholders.

The latest our latest news on the company.

I will go straight to this and literally this has happened.

Happening in real time.

We are.

Pleased to announce.

That immediately following his playing career whenever that may be seven time Super Bowl winner, Tom Brady, who will be joining us at Fox sports as our lead analyst.

Over the course of this long term agreement.

Tom will not only call our biggest NFL games with Kevin Burkhardt.

Also serve as an ambassador for us, particularly with respect to client and promotional initiatives.

We are delighted.

Tom has committed to joining the Fox team and we wish him all the best during this upcoming season.

I am sure everyone joins me in warmly welcoming Tom Brady onboard.

Thank you very much and with that I'll hand over to Joe. Thanks.

Thanks, a lot Gwen.

And now we'd be happy to take questions from the investment community.

Ladies and gentlemen, I would like to emphasize the functionality for the question and answer queue.

If you wish to ask a question. Please press one then zero on your Touchtone phone Youll hear a tone, indicating displaced yourself in queue. You may remove yourself from the queue at any time by once again depressing one zero.

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Once again, if you have a question. Please press one zero at this time.

One moment please.

We have a question from the line of Ben Swinburne. Please go ahead.

Well I wanted to ask when Tom Brady is actually going to start playing but I'll save that for an offline conversation.

Congrats on that deal I wanted to ask you guys about to be heading into fiscal 'twenty three.

Could you talk a little bit Lachlan about how you plan to position that business in the upfront.

To the extent you can share any any goals in terms of how much of that business may actually be sold in the upfront and how are you guys thinking about investments relative to letting that business start to generate some profits next year as you continue to obviously see a lot of top line growth. Thanks.

Thank you very much been looking at I can I can.

I can tell you on the first part of your question that like I said, we're incredibly excited to have Tom joining us.

Entirely up to him for when he chooses to retire and move into <unk>.

What will be.

Yeah.

Exciting and stellar sort of television career, but that's up to him to make that choice one when he sees fit.

In regards to.

<unk>.

And the Upfronts and <unk>.

And how that plays into sort of how we position it can be business going forward and to when it returns to profitability.

Sure.

It is important to note that on Monday, when we are.

Engagement in our upfront presentations, we've already spent.

Several weeks in engaging with clients and advertisers.

On upfront negotiations and <unk> has been at the forefront of all of those conversations I think.

Our clients can see.

Both the the shift.

Two to Avon and the streaming.

Advertising at.

At the same time, they see the strength of where <unk> is positioned as a leader in that market.

We're constantly.

It's on.

Sure.

Regular sort of daily basis.

Balancing carefully.

On the AD load.

<unk>.

And the fill rate of that.

Those advertising.

Slots and as you know <unk> has are incredibly intelligent AD tech that can do that dynamically view.

<unk> to view, our customer to customer.

We can dial that up or dial it down.

Really as we see fit but we think it's important that this.

Early lifecycle of advertising video on demand services that maintain that.

The highest quality.

Viewer experience.

<unk> consumer consumer.

Consumer experience on the service. So so we're pleased with where that is but really would be up to us to be able to increase that AD load and drive revenue and bring it back to profitability, which as you know <unk> has been profitable in past quarters, but as of.

The right strategy the right way forward is to continue to carefully.

And deliberately invest in the growth of <unk>.

Which we think is going to really be a leader in advertising video on demand certainly in this country.

Operator, we can go to the next question.

We have a question from Jessica Reif Ehrlich Bank of America. Please go ahead.

Thank you.

Think of how we make this one question.

Im sure you are too.

Key drivers are obviously advertising and distribution revenue and in the avatar.

Credibly, well positioned going into the upfront given as you highlighted your incredible array of marquee sports.

Also have usfl coming in and news good more dominance. So just can you give us color on expectations for I mean, you are positioning thats great expectations for it.

Your performance in the upfront market and the health of the overall industry and on the.

Pay TV side.

Alright.

Again outperformance in news and other areas is very strong pay TV market has been shrinking.

Could you seem pretty confident about the affiliate renewal cycle coming up so can you give us color on that and how you offset the shrinking universe.

Sure. Thank you Jessica.

I'm not sure if that was two questions are 7%, but there are always good questions. So thanks. Thank you very much thanks on the outlook so.

I think I'll think I'll remember to advertise.

Happy to answer them.

Most of them as I go through his answer but look from a from a advertising.

Perspective, and particularly heading into this upfront.

Upfront negotiations, where we're already in the and the upfront season, but as we as we get to the pointy end of that about season, we're seeing.

Really solid demand across our businesses.

And pricing.

Entertainments.

Being.

Pricing.

Yes.

In the sort of high single digit mid to high single digit sort of range above last year, but in sports news. As you said, we are we're very well positioned and we're seeing sort of a pricing and sort of the mid double digits. So sort of the mid to high teen some pricing increases.

Driven driven by demand across some live sports and live news.

So as we as that gives us a great deal of confidence as we as we move into the into these upfront negotiations.

You add to that obviously, the inclusion of <unk> with 50%.

Growth in TV, DVT time, and engagement, it's a really strong position to be in.

<unk>.

Our sports properties are driving and that are must have.

Some are tent poles. This year are really driving a lot of interest from our clients.

I could give.

One word of advice, which I wouldn't do but if I, if I gave one way to revise.

Our clients and advertisers advertising partners, it's get in early because.

These some of these key events are selling extremely well.

Already.

So we fully expect to see sort of continued our advertising strength.

Without even talking about the midterm election cycle, which.

Bye all.

Estimates.

We will be a record midterm.

Cycle for us and we keep a close eye on the.

The races.

In all of our <unk>.

<unk> markets and.

It's pretty amazing to see where we have not.

No no no it's tight races, but also.

Sure.

Contested primaries pretty.

Pretty much across the majority of our owned unknowns.

Stations, So we think.

Coming midterm elections will be will really be an advertising boon for us as well now moving onto them.

Pay TV pricing.

From frankly from both an advertising point of view, which is our incredibly strong with the strength of our.

Fox News and I spoke about a little bit.

In my earlier statements.

The strength of Fox news, but also the strength of them.

Our Fox news and the station group from a retransmission.

And distribution revenue point of view really has never been stronger Fox news has.

Effectively competing with the free to air.

Broadcasters in terms of audience, it's actually usually beating our many nights of the week or beating.

Broadcast networks and we expect.

Our pricing power to continue to strengthen with performance.

Like that.

So.

I think I've answered.

Most if not all of your questions Jessica.

In short from both from an advertising perspective and from a <unk>.

Television distribution, a retransmission revenue perspective, we think we're well positioned particularly in a year or a cycle, where we're coming up to I think over the next two years two thirds of our distribution revenue coming up for renewals.

Operator, we can go to the next question.

We have a question from Robert Fishman of Moffett Nathanson. Please go ahead.

Good morning, a question on TV profitability, given the $30 million write down of the scripted programming at Fox Entertainment in the quarter and then as we get closer to fiscal 'twenty three when Thursday night football losses go away can you just help frame the other swing factors that could impact a big increase in TV EBITDA next year.

Maybe.

And maybe any early look into incremental digital investments and how youre thinking about the general entertainment programming spend helped fill that Thursday night program in gap. Thank you.

So.

Hey, Robert how are you.

<unk>.

Hi.

One of the.

Pieces of work that the entertainment network has sort of undertook over the last I'd say.

Over last year, but it's.

Earlier than that is really.

The ability to kind of transform.

That business.

To work.

Tightly control.

Programming costs in a way that really hasnt.

At a level that really hasnt been achievable before.

This goes to the acquisition.

A few years ago of Bento box. So we can control more of our animation cost. It goes to the acquisition of TMZ. So we can really control.

High quality.

<unk>.

Factual content and specials that we put on the.

On the network and other things such as Marvy stalled MRV.

Focus a bit more on on <unk>. So the work in the background.

Being able to own and control I should also mention by the way.

I apologize.

For now we're very importantly.

The joint venture with Gordon Ramsay and Gordon Ramsay Productions, that's incredibly exciting Gordon Gordon as being a key partner of ours for many many years and his his plans.

The growth of that business not just in the U S. But what we can do with the IP.

Gordon Ramseys IP around the world.

It is really exciting.

To see so we have high expectations for them for that partnership so all of that really.

Feeds into.

The networks really ability to control its programming across across multiple months as you know the Fox network is only.

Two hours a night in prime time and so on.

Easier.

<unk>.

Volume of hours to digest in the program.

Towards the last part of the question.

So Robert just in terms of the swing factors listen there's a ton of tailwind behind the TV segment going into next year.

You called out as they not football dropping off so that I think we've said in the past that releases around $3 50 to 400 to the bottom line for us net net net.

But then you've got all the other things that play into next year for our <unk> Super Bowl political and you've got the FIFA World Cup and then you've got to do with some momentum that's showing top line. So.

We couldnt be more.

We couldnt be better positioned for fiscal 'twenty three from the television segment perspective, you can say more please.

Steve very careful.

Thank you <unk>.

Operator, we can go to the next question we have a question from Doug Mitchelson of Credit Suisse. Please go ahead.

Lachlan and team. Thank you for taking the question.

Should investors expect fiscal 'twenty three to see operating leverage against your digital investments revenue growing faster than opex with those and.

I'm not sure if you're prepared to give any sort of update on ambitions for <unk>, but it's been growing rapidly youre investing a lot in it.

And <unk>.

Fox has been kind of interesting investment in that.

Not making a stronger pivot to streaming as some of your peers, but <unk> an interesting investment opportunity that's impacting margins. This year. So just trying to understand where you think that asset could go and what the investment cycle looks like what would be helpful. I think thanks, so much.

Thank you very much Doug So look we see the level of investment this year in our digital properties.

That's to be but it also includes some.

Fox whether in Fox nation.

And some other smaller smaller elements, where we see the current level of investment is the appropriate level.

Going forward, so thats in that and we've guided market between two and $300 million that we're putting back into investing into growing those businesses, we would not expect.

Any kind of significant level.

Above that on sort of our current our current plans and.

And we think that level is the right amount, particularly with.

An asset like <unk> that that really is going to really going to be.

The future of how people watch.

TV.

In this country, we think.

When you look at to be it's interesting I look this up the other day, but.

Farhad really began.

<unk> are there early version of what ultimately became <unk>.

AD tech business over.

11, or 12 years ago, and that will ultimately evolved into <unk> as he understood.

The value of taking as is.

Intelligent AD tech business and actually licensing programming, along with that to monetize that program in most most efficiently and as I said before it's great to have that.

<unk> is a company really focused on on the technology.

A side of this business.

And understand how they how they drive engagement and drive viewing which is very different from what.

Okay.

On older sort of media.

Model or our view of it would be.

So.

Because of that because of the long track record the <unk>.

Lead time, they have the fact that they are they've been doing this a long time, we think it is.

It's really.

Poised.

To continue to win in the market.

And that level of investments is the right level to help it achieve them.

Operator, we have time for one more question.

Our last question will come from the line of Stephen Cahill of Wells Fargo. Please go ahead.

Sure.

Yes, thanks very much good morning.

Maybe first I'm, sorry, if I missed this but I think you maybe indicated that you could be at an end of arbitration by June . So just wanted to see if that timing is still correct and would love to know if you have any metrics to update us on for Fox bet and how that's continued to grow.

And how you kind of feel about the relationship with flutter and some of your strategic opportunities. There and then also as we think about long term sports rights you have got a lot of Reits, especially digital rights.

Do you see those as largely staying inside the linear ecosystem or do you think there is an opportunity to sublicense. Some of those to some of your peers, who are spending a lot on their ala carte streaming products. Thank you.

Yes.

Thanks, Thanks, very much Steven.

So.

In terms of.

Our sports wagering.

Strategy and business.

We are.

We remain in arbitration.

<unk>.

We expect the summer.

That arbitration to be.

Resolved.

If not sooner and.

There is not much more we can we can we can say about it but.

It's been as you know.

Along sometimes arduous.

Our process.

But the most important thing there too.

Remember I suppose is the value of.

The business that we've created and the value of that sort of top of the funnel.

With Fox bet Super six in particular, a free game with $6 6 million I believe now and we are in a.

Traditionally.

Our quiet period for them.

Sports radio and particularly around you know obviously with no.

With no football.

And so.

The Fox Super services continue to do incredibly well and continues to be able to them to.

To drive.

<unk>.

Wagering customers in Japan games. So so we're incredibly pleased with how we've we've delivered operationally on our on our side of the partnership.

So we look forward to.

The end of arbitration and moving forward with our <unk> strategy.

In terms of sports rights and whether we would.

Whether they remain on linear.

Our own sort of owned sort of linear platforms.

Absolutely, we think that our key our key rights.

Deserve the right.

Bill just to stay on on our broadcast and cable networks exclusively this is very important to us it both gives.

R R.

Our league partners, the most breadth and reach that they can they can achieve and viewership for their fans.

But also it's really key to our distribution strategy.

We will deliver industry leading distribution.

Our revenue gains.

By keeping.

They are our highest quality exclusive content within within.

Our platforms as I said are exclusively.

Sublicense sub licensing those to others or to put behind a.

Struggling paywall I would not be the right strategy.

At this point, we are out of time, but if you had any further questions. Please give me or Dan Carey a call. Thank you once again for joining today's call.

Ladies and gentlemen that does conclude your conference call for today. Thank you for using AT&T executive teleconference. You may now disconnect.

John we're going to hang up and we could chat on zoom.

Yes <unk>.

I'm good.

Sure.

We're sorry your conferences ending now please hang up.

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Thanks.

Okay.

Yes.

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Yes.

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Yes.

[music].

Okay.

Yes.

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Yes.

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Yes.

Sure.

Yes.

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Yes.

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Sure.

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Yes.

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Yes.

Right.

Sure.

Thanks.

Okay.

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Yes.

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Thanks.

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Yes.

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Yes.

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Yes.

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Thank you.

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Yes.

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Thanks.

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Yes.

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Thanks.

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Yes.

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Thank you.

Yes.

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Thank you.

Sure.

Great.

Yes.

Okay.

Steve.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Please proceed.

Sure.

Okay.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

Sure.

Okay.

Yes.

Thank you.

Okay.

<unk>.

Okay.

Sure.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

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Yes.

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Yes.

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Sure.

Yes.

Sure.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Got it.

Okay.

Thanks.

Sure.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

Thanks.

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Yes.

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Please.

Sure.

Thanks.

Okay.

Hi.

Sure.

Okay.

Sure.

Okay.

Yes.

Okay.

Yes.

Okay.

<unk>.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Yeah.

Yes.

Okay.

Yes.

Tom.

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

Thank you.

Okay.

Sure.

Yes.

Thank you.

Okay.

Yes.

Okay.

Yes.

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