Q2 2023 Fox Corp Earnings Call

February 8, 2023

Okay.

Yeah.

Ladies and gentlemen, thank you for standing by and welcome to the Fox Corporation second quarter fiscal year 2023 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 the 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 is being recorded I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead Ms Brown.

Thank you operator, good morning, and welcome to our fiscal 'twenty two 'twenty three second quarter earnings call. Joining me on the call today are Lachlan Murdoch Executive Chair and Chief Executive Officer, John Nolan, Chief Operating Officer, and Steve Tomsic, Our Chief Financial Officer, first Lachlan and Steve.

We'll 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 company's SEC filings. Additionally.

Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA or EBITDA as we refer to it on this call reconciliations of non-GAAP financial measures are included in our earnings release and on our SEC filings, which are available in the Investor Relations section of our web.

And with that I'm pleased to turn the call over to Auckland.

Thanks, Gabby and thank you all for joining us this morning to discuss our second quarter results.

Our fiscal second quarter continued to build upon the strength of the first quarter excuse me to deliver a record first half ratings and revenue at Fox.

Financially, we delivered a 4% increase in our top line, including 4% advertising revenue growth. Our EBITDA grew a massive 71% principally due to strong advertising results from from sports and political as well as the impact of exiting Thursday night football.

Our television segment led this growth and had a truly stellar performance.

The stations group posted another record political midterm cycle with approximately $250 million booked during the first half of our fiscal year. This.

This is higher than our previous mid term record and just shy of our fiscal 'twenty. One presidential year record. These are impressive numbers and reinforced the strength and breadth of our station group.

Fox Sports was also a key growth driver of this past quarter, where advertising pricing and demand remains solid on the back of viewership records for the NFL and for the World Cup.

By every measure Fox sports as having an extraordinary year Fox as domination of the fall was led by four of our most prominent rights packages. The NFL Big 10, the Big 10 Network Major League baseball and FIFA, all coming together to produce a truly powerful schedule.

For the fourth straight calendar year Fox Sports is the industry leader in live events with some notable achievements that bode well for our future, including the current NFL regular season on Fox averaged over 19 million viewers and finished as the number one NFL package on television.

America's game of the week average just over 24 million viewers and is projected to be the most watched program of all of television for the 14th straight year.

And our Thanksgiving game. This year was the most watched regular season game ever on any network delivering 42 million viewers.

College football had its most watched season ever on Fox led by Big noon Saturday, which was the most watched college football window for the second straight year, while the annual Ohio State and Michigan rivalry was the most watched regular season College game on any network in 11 years.

And of course, the 2022 mens World Cup exceeded our expectations with average viewership of over the tournament up 30% from the 2018 matches, we can't wait for the Women's World Cup. This summer and we're already getting ready for the 2026 men's World Cup here in North America.

Of course, the strength of the Fox Sports portfolio was on full display this past Thanksgiving with our traditional Thanksgiving NFL game, USA versus England, and the World Cup a huge college football game in Americas game of the week all spread over just four days.

The ratings were impressive but their revenue we generated was even better we wrote just shy of $250 million over the long weekend.

And the strength of Fox Sports has continued into the current quarter on the back of exciting player football and what will be a record sold out Super Bowl This coming Sunday.

At <unk>, we had another strong quarter, where AD revenues grew by 25% over last year as we continue to outperform our peers. We have seen increases in almost every major kpis, including Cpm's TVT and engagement.

In fact to be had its highest quarterly viewership in the fiscal second quarter with total viewing time up 41% year on year, while December alone was the highest TVT and highest use of month ever.

These trends have continued early into the third quarter as to be as viewers and content to the platform.

At Fox Entertainment, Rob Wade has settled into his new role as CEO and has already launched two of the season's biggest hits accused ranked as the most watched debut on any broadcast or cable network in two years.

Special forces worlds toughest test is this season's number one unscripted program.

Further Fox Entertainment recently announced a multiyear extension with Hulu.

Of our long standing content licensing agreement, which bolsters Fox of streaming audience and provides Hulu with a key point of differentiation in a crowded streaming world.

Turning to Fox News media the Fox News channel ended the second quarter as the most watched cable network in total day and in primetime while maintaining its lead as the most watched cable news network, beating CNN and MSNBC combined in both total viewers and demo in the quarter for both Prime and total day.

And the Fox business network ended the quarter as the most watched business cable network, meaning CNBC and total viewers during the business day and market hours for the third consecutive quarter.

Fox Nation accelerated.

<unk> growth over the last quarter and last year and had the best quarter ever for engagement in terms of hours viewed no doubt driven by brilliant fresh content like Yellowstone $1 50.

Looking at the distribution side of our business. We have now completed most of the deals expiring in the first year of our multiyear affiliate renewal cycle. So far the results confirm the confidence we have in monetizing our leading brands and content and we are pleased that the market recognizes the value that fox delivers to their offerings.

It has been a truly strong quarter, one that showcases the very best of Fox and has shown that the underlying performance of Fox is exceptional exceptionally healthy.

Looking ahead into this third fiscal fiscal quarter, our topline will of course be aided by a record Super Bowl, but we are still seeing solid national demand for our news and sports platforms growth in the <unk> and we are encouraged to see multiple AD categories pacing strongly positive at our local stations.

Before handing the call over to Steve.

I want to add some perspective to the Fox story.

And the almost four years since the spin Fox has grown and flourished while pursuing a simple strategy a core business of trusted brands that delivers consistent and substantial audiences and our portfolio of digital growth initiatives that scale over time.

With our focused sports and news franchises, we have taken a differentiated approach choosing to serve our audience, primarily through the pay TV ecosystem, which optimizes the delivery and value of live programming.

Our ability to drive our business and execute our strategy is underpinned by a number of accomplishments for.

For example.

Our affiliate and advertising revenue growth is driven by our pricing power reinforced by regularly delivering large scale audiences and uniquely providing exclusive content to our pay TV distributors. This.

This approach has led to nearly $2 billion in affiliate revenue growth and over $1 3 billion and advertising revenue growth since the spin in 2019.

By focusing on live content or core Fox brands have been able to run sharply counter to the broader trend of linear TV.

We can see this by looking at consumption trends.

Over the past 10 years consumption of Fox sports events is up 18% and consumption of Fox News is up 28%.

Our portfolio of sports rights is secure and is the best out there with the vast majority of them locked up for the foreseeable future.

Our NFL rights the single best package in all of television extend through 2033 season with.

We've just completed the first year of our major League baseball extension and renewed our big 10 rights, which each takes us out through the end of the decade.

We have the European championships through 2028, and another cycle with our FIFA World Cup rights.

These long term rights provide us the visibility necessary flexibility to plan, our businesses and pursue growth opportunities moving forward.

On the digital side, we've made calculated investments in areas, where we believe we can add significant value sports wagering and advertising video on demand are the two best examples of this.

We have a firm footing in the sports gambling space. We were the first among U S media companies to strike a partnership with betting offer up.

With a betting operator, because we see the potential for sports betting to drive engagement enhance the viewing experience and keep viewers coming back to Fox sports linear and digital platforms. The.

The various financial options and investments we have reflect our view that sports gambling as a long term play and we are focused on cementing our leadership in this rapidly evolving and high growth sector.

To be the number one Eva player leads our streaming strategy and with minimal investment when compared to our peers.

Revenue and engagement Kpis that too we have far exceeded our expectations and our consistently growing in healthy double digit range. Since we acquired almost three years ago. The result of tubular proof that our strategy is working and we will continue investing in and growing this platform.

Finally, I'd like to address the recent announcement regarding news Corporation.

As you know my father, and I reached the conclusion that exploring combination with news Corp is not optimal for shareholders, a Fox or news Corps at this time.

As such the special committees were disbanded and no further time or action is being taken on this topic.

I've said in the past that I think scale provides flexibility and that it is important to be prepared when opportunities present themselves.

The rationale behind considering a combination of these core was about that scale flexibility synergies opportunities, great IP and above all creating value for all shareholders.

As the CEO of Fox.

I have never felt more confident about our strategy the quality of our assets and the strength of our financial position.

This confidence is clearly demonstrated by this morning's announcement to increase our share repurchase authorization to $7 billion.

With the immediate deployment of $1 billion of the expanded authorization toward an accelerated share repurchase transaction, while continuing our current in market purchases.

Consistent with our track record, we remain committed to delivering value for our shareholders in a thoughtful and disciplined manner and we will continue to explore every opportunity to maximize that value over the long term.

And now let me turn it over to Steve for more on the results.

Thanks, a lot and good morning, everyone excuse me <unk>.

<unk> continued to deliver financially in the fiscal second quarter with total company revenue growth of 4% and 71% growth in EBITDA.

Notwithstanding the absence of Thursday night football or overall revenue growth was led by a 4% increase in advertising revenues were in the quarter. We saw continued strength in political advertising at the stations, which when viewed across the full fiscal first half nearly matched the political record set during the 2020 presidential cycle.

Additionally, our sports advertising was supported by a full roster of marquee events.

And to be continued to sustain its high growth trajectory.

Our affiliate revenues increased by 1% with limited renewal activity impacting the quarter and trailing 12 months subscriber losses remaining consistent at approximately 7%.

Quarterly adjusted EBITDA was $531 million up $220 million over the prior year. In addition to our revenue growth. We also benefited from lower expenses as a result of the early exit from the Thursday night football agreement.

Net income attributable to stockholders was $313 million or <unk> 58 per share up meaningfully against a net loss of $85 million or negative <unk> <unk> per share reported in the prior year period.

Alongside our growth in EBITDA Youll recall that our GAAP P&L is regularly impacted by the change in fair value of the Companys investment in Florida, which we recognize the net.

Excluding this impact and other noncore items growth was strong with adjusted EPS of <unk> 48 per share up 35 against last year's settings <unk> per share.

Turning to our segments at TV, we delivered 6% revenue growth, including a 5% increase in advertising revenues.

As you know our advertising revenues in the December quarter of last year benefited from a coverage of Thursday night football.

Despite that comparable headwind, we delivered meaningful gains across the segment. This was led by the strong political cycle. The addition of the World Cup at Fox Sports and continued strong growth at <unk>.

On the NFL, specifically, we also benefited from strong pricing a record breaking Thanksgiving day broadcast and the timing of weak heating of the season sliding back into the December quarter.

Meanwhile, advertising revenue growth at <unk> was up 25% in the quarter and exceeded $200 million on the back of record levels of engagement.

And an uneven programmatic advertising marketplace, we are able to maintain cps and are well positioned to deploy more inventory as market conditions strengthen.

Television affiliate fee revenues were up 6% as healthy growth and pricing across all Fox affiliated stations continued to outpace the impact from subscriber declines.

Other revenues increased 26% in the quarter, primarily reflecting the consolidation of the prior year acquisition of my Vista.

EBITDA at our television segment was up to was up $529 million to $256 million as we benefited from the strong political market and realize the anticipated financial benefit from the exit of FSA night football agreement.

These benefits were partially offset by higher costs from the World Cup and the annual growth in <unk> amortization, we see across our sports portfolio.

To the levels reported in our fiscal first quarter and net EBITDA investment in <unk> amounted to approximately $50 million in the December quarter.

At cable we saw revenues generally in line with the prior year cable advertising revenues were essentially flat.

Lynn mentioned, we continue to see meaningful pricing gains in national advertising across our leadership brands. Additionally, our national sports networks benefited from the broadcast of the World Cup in the quarter.

However, this was offset by softer direct response marketplace that impacted Fox news media.

Cable affiliate fee revenues were broadly flat coming in at one point out $3 billion.

As we had signaled previously we are in the early days of our next distribution renewal cycle, where we expect revenue gains to be skewed towards the television segment.

Meanwhile, cable other revenues were up 7% in the quarter. Once again led by high in Fox Nation subscription revenues.

EBITDA at our cable segment was $353 million compared to this.

Compared to the $668 million reported last year, largely due to higher cost at the National Sports networks led by the World Cup and postseason baseball.

<unk> were also elevated at Fox News media due to the digital investments at nation, and weather and higher legal costs associated with ongoing litigation.

Now turning to cash flow were consistent with the normal seasonality of our working capital cycle, we recorded a free cash flow deficit of $610 million in the quarter.

As typical first half trend reflects the concentration of payments for sports rights and the buildup of advertising related receivables both of which will reverse in the second half of our fiscal year.

From a capital deployment perspective fiscal year to date, we have repurchased $550 million by our share buyback program.

This takes the total cumulative amount repurchased 315 billion rep.

Representing 15% of our total shares outstanding since the launch of the program in 2019.

In addition, today, we declared a <unk> 25 semiannual dividend.

And as Lachlan mentioned this morning, we also announced an incremental buyback authorization of $3 billion.

Taking our total authorization to $7 billion.

We will immediately deploy $1 billion of this expanded authorization toward an accelerated share repurchase transaction, while concurrently continuing with our normal course buyback pacing, which would see us repurchase $450 million in additional shares across the remainder of the fiscal year.

These meaningful capital return measures are enabled by the strength of <unk> of our financial position. So we again closed the quarter with a very robust balance sheet, comprising $4 billion in cash and $7 2 billion in debt.

And with that let me turn it back together.

Thank you, Steve and now we would 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 you will hear a tone, indicating you have been placed in Q you may remove yourself from queue at any time by once again pressing 190.

We're using a speaker phone please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question. Please press one zero at this time and one moment. Please for your first question.

Your first question comes from the line of Robert Fishman from Moffett Nathanson. Please go ahead.

Hi, Good morning, everyone Lachlan you talked about the importance of scale in the media industry.

Now that the news Corp deal is no longer being explored can you just help investors think about what the future of Fox is as a standalone entity in the coming years and ultimately do you think it would be better off combined with another strategic or financial partner.

Hey, good morning, Robert Good to hear your voice.

For the question. So I think I do think scale is important.

As we look at sort of our growth going forward and.

Enhancing our growth opportunities I think scale is important but equally important.

Is the depth of our business. So we think about scale in terms of adding.

And broadening our sort of business some business lines, but also the depths of how we engage with our consumers and we will be investing I think.

Probably equally in both.

If we look at our strategy and how it's.

Performing.

You just have to look at our results this quarter, our results really being truly stellar I think we stand out.

The media landscape certainly in this country in terms of the.

The health of our of our results and that goes to our strategy. We're very focused we're focused on.

Ah yes.

Core set of brands that are really more.

Must have brands in.

In the United States.

Media landscape. So so we like our strategy, we're absolutely focused on it but we will.

Pursue both scale and further investment in sort of the depth of our engagement with our consumers.

Your next question comes from the line of Jessica Reif Ehrlich from Bank of America Securities. Please go ahead.

Thank you good morning.

Yes.

Two topics one can you give us some color on the advertising outlook.

Obviously, it'll be a great quarter with the Super Bowl, but just.

Besides that underneath that and then to be.

Maybe talk a little bit more about the drivers of growth I think you were adding Warner brothers discovery channels.

Thanks for that Steve said that something that you held back advertising.

What's going on with demand there, but how many minutes or you're selling and how many can you go up to.

Hey, Jessica good morning, so.

Let me start with the advertising market and as you mentioned and obviously I don't believe I'll talk to the.

Kind of the outlook.

Advertising.

There's a lot of talk about advertising being soft in the market, we're really not seeing that we're seeing advertising being sort of fluid and money coming in late so it is different it's a different environment than we were in.

A year ago, or even a couple of quarters ago, but at the end of the day, we're still.

Hitting hitting our goals and achieving our revenue targets is just coming in late.

And look I think to be honest I think that goes to the strength of our portfolio I think being in news and being in sports.

And the leader in those two categories.

<unk>.

I think sets us apart.

In the advertising.

And the advertising marketplace from a lot of our peers. So I don't want to say that thats, our strength of our certainly our relative strength in advertising is not <unk>.

Indicative of the whole marketplace, but it's definitely indicative of our our brands and our ability to achieve our revenue.

<unk> so the Super Bowl did talk about some specifics as I said the money.

I'm in late so we had some nervous nervous moments.

But we will right just shy of gross <unk> got $600 million of revenue.

Next Sunday.

We are we are sold out it will be a record Super Bowl for US both in terms of total revenue and obviously in what.

What we would achieve for each on each spot.

<unk>, if you back out the Super Bowl.

We are still up in national advertising revenue.

So I think that again bodes to them.

Certainly the strength of our brands and.

And so the power of the <unk>.

<unk>, if I look at local stations Jessica categories, we're really happy to see a lot of categories back into robust growth auto.

Pacing up almost 30%.

<unk>.

Health up 30% pharmaceuticals up 45% travel up 60% and of course this is offset.

With categories like.

Crypto.

Money exchanges I mean <unk>.

<unk>, 97%.

To find out who the 3% less.

Advertising. So so there are some swings and roundabouts, but the key categories are back.

Back in a in a very in a very strong way.

So thats probably more than you wanted on advertising Jessica.

<unk>.

With all of our <unk>.

So I would say almost all of our Kpis.

Our record highs I think December at the end of December was actually particularly strong year in terms of that.

In terms of.

TVT and engagement.

And what we'll see is we'll see revenue revenues up 25%, but I think what we're really pleased about is when your engagement and your total viewing time is up by more than that as the market strengthens we expect certainly more revenue to flow and follow that.

That all goes.

That audience.

We have garnered.

<unk> and all of them.

Major studios continue to work with US I think we're seeing a benefit of people realizing that there.

Their libraries to sort of deep libraries, we can help them monetize those those libraries and so we're seeing you mentioned the the Warner Brothers deal. We're seeing everyone worked with US which is why <unk> has the biggest.

TV and movie library in streaming anywhere in the world. So we're really very very pleased with it.

Next question please operator.

Your next question comes from the line of Phil Cusick from Jpmorgan. Please go ahead.

Hi, guys. Thanks.

I Wonder if you could talk about wagering Lachlan you discuss cementing your leadership today and last quarter I think you discussed potential volatility in that market, where do you see the market growing at this point and how ideally would you like to see Fox involved. Thanks.

Look I think we have the <unk>.

We remain incredibly.

Excited and optimistic about about the wagering market going forward.

In this country.

Obviously, it will take some more time for <unk>.

Further states to be to be licensed.

And you'll start to see a shift from.

Wagering advertising and marketing shift from local markets to national markets. We're obviously.

Are incredibly well positioned on both sides to to capture.

<unk>.

Revenue from <unk>.

The wagering operators as they battle it out for us supremacy in each of their markets. So we've done extremely well the local stations.

I think we'll see that shift to international markets, where I'm, obviously Fox sports and to some extent a Fox news in the Entertainment network, we'll continue to capture that revenue. So we're incredibly optimistic about.

<unk> it.

From a corporate perspective, we're also.

The best positioned.

Media brand.

To continue to partner with our wagering.

Partners.

Particularly obviously the 18, 6% option that we have in <unk> is.

Sure.

Fantastic position to be and we have about 10 year option I think we were about eight years to go on the option.

And flutter will be our partner for a long time, so we feel very well in terms of where we're positioned.

Next question please operator.

Your next question comes from the line of Ben Swinburne from Morgan Stanley . Please go ahead.

Ask when Tom Brady is joining the Fox sports some of that is helping me.

And if you don't want to answer that one maybe just a couple of strategic questions picking up on Phil's what.

Do you guys think the value of Fox bet is and what could that business or that asset over the longer term and sort of the.

Sort of the bulk case, and then you extended with Hulu not a huge shock, but just any comment on.

Sort of whether that's enough of a needle mover financially or how robust the market was for for those for that content. Because obviously, that's a lot of licensing revenue potential just wondering if you could comment a little bit on how you approach that renewal and the outcome.

Thanks Pam.

Let me I'll answer that Tom Brady part of the question.

<unk> I'll, let Steve talk to the value of our Fox bet and importantly, obviously, the the flutter <unk> option.

<unk>.

Let me.

It won't be the first to congratulate Tom on a stellar career and congratulate him on his retirement.

Fox Sports team.

And Fox Corporation overall.

Really excited to have Tom join.

Join the team here that will be in the fall of next year 'twenty four.

It's going to take a little bit of time to decompress and.

Well deserved after such a stellar career.

Amit just quickly talk to Hulu.

The Hulu renewal.

Was important very important to us and also very important to Hulu.

The kind of symbiotic relationship that we have with Hulu.

Those in.

<unk> as viewers.

More and more watch our content on a sort of catch up basis. So when we look at our hit shows we're not.

Monetizing them in the first window in the live urban live plus same day window as you all know in the same manner that we used to and so by being able to capture the.

The engagement after alive and same day or even live plus seven days is critically important in our Hulu deal really allows us to do that for Hulu It gives them.

Remainder is content the next day.

And they are able to.

I'd say sort of benefit from a piggyback on the marketing.

Spend in the reach that we give all of our content as we as we push it out so it works very well for Hulu.

And it works very well for us.

Steve do you want to talk to the approximate value panel listened on Fox bet.

We take a step back and just see out.

Bedding in totality in terms of the investments that phosphate is one component of it and it's an important component we'd like to see it in more states in the four states had seen at the moment, but.

It is being operated by flooded Hubei the investment cost of that asset.

In some respects.

They have a history in terms of how they develop that but we look at it.

Clear market success in terms of Fox Pitt <unk> for us in terms of the way we develop that can cross promoted that without stations.

Also it's not just Fox Pitt sports betting, but it also includes the puck as does.

Non sports betting is it so it's an important asset, but when we look at the totality of bidding.

Trading position.

We increasingly think that the.

Option that we have a fine jewelry is the one that's really important for us as the leading market player. We have the opportunity over a long long period of time to take a very very meaningful stake in a play.

Sort of.

Head and shoulders market later right now.

Operator, we can go to the next question.

Next question comes from the line of Doug Mitchelson from Credit Suisse. Please go ahead.

Thank you.

Memorial Auckland, where are you in a lifecycle for your digital investments I'm, just sort of curious when I think about <unk> pretty consistently been talking about growth every quarter on these calls and engagement you're adding more content.

Much more.

Content is there to add how much more growth is there to drive it to be in the same question on the Fox digital side. Thanks.

Thanks, Doug so in terms of the lifestyle kind of think about.

Sure.

The question in terms of the lifecycle for our sort of digital investments I think.

Okay.

The reality is they are there.

Teenagers that are better.

Putting on putting on muscle.

And Graham growing on growing it unpredictable.

Pretty spectacularly so.

If I look at <unk> as an example, and you think about the key metric we talked about now for several quarters is a total viewing time.

Total viewing time is.

So it's not like we only got better.

Ratings and we can get.

We continue to grow to a total viewing time.

The the revenue that we're seeing follow that and we have 25% up in this quarter, which I think is pretty pretty pretty.

Asset.

But the opportunity is much higher right because the total viewing time has grown faster at a much.

A bigger rate faster rate than the than the revenue has so.

Already in within <unk>.

When we look at these metrics.

Ah ripeness for four very significant revenue growth so.

So yes.

Digital investments are our adolescence, but there, but they are but there are a huge huge upside.

As they get older.

<unk>.

And then when you talk about Fox digital the digital assets now I was pretty amazed we went through some numbers.

Yesterday, just things like the local TV stations, the digital advertising business now with our local TV stations is really becoming quite significantly so when we look across our whole portfolio.

We push further into into.

Our websites are our fast channels.

Our our apps. This this revenue is becoming very significant and even in parts of the company that you are you wouldn't expect so.

So we.

We believe the future of our business is obviously are digital and we're making that transition pretty rapidly and very robustly.

Operator, we have time for one more question.

That question comes from the line of John Hodulik from UBS. Please go ahead.

First question on the balance sheet.

Investors will definitely like the accelerated repurchase but $4 billion on the book.

Okay.

Relatively low debt.

Maybe talk about sort of the usage of that cash I mean, how much cash you need on the books and maybe what the M&A environment looks like out there and what kind of opportunities you see and then.

On the affiliate line you said you haven't seen the impact of the renewals.

Third third third.

But you'll see over the renewals you will expect to do over the next couple of years I mean, when do you expect to sort of get into that sort of.

Wheelhouse and see that those lines really start to turn from the renewals.

Thanks, John .

Steve jump in.

At any point, but.

Ah.

Now if you want to.

Now I'll start I'll start I'll start with thanks, John So first of all on the.

On the balance sheet and we I think we do have a enviable balance sheet, we're going to deploy our capital as we have in a very disciplined.

Manner and entirely focused on on our shareholder returns for all of our all of our shareholders that will be both as evidenced this morning.

With our accelerated share repurchase.

Which we think is a great sort of mechanism a strategy to return.

Some of this capital to our to our shareholders.

But we will also obviously we'd be looking at.

M&A and other opportunities to use to deploy our capital against we don't have anything.

On the table today.

But we are I think in a <unk>.

Strong position.

Capture opportunities when they present themselves and obviously there are.

Other companies in our sector that are that are not in this great position and will be things that will kind of share cast our eyes over so so.

We do expect that M&A will be part.

A more important part of our toolkit as we deploy capital, but we have nothing nothing on the table in front of us today.

<unk>.

Before I go on to affiliates to a given again just John I think if you fast forward legacy fast forward to the end of the fiscal based on the ice.

In a regular way share repurchases will have down $4 6 billion in share repurchases by.

30 June call it.

You compare that against how much we've deployed in M&A, which on a gross basis about <unk> nine on a net basis. After asset sales is probably 500 $600 million. So you've been super balance Super disciplined on M&A and if anything the SKU. So far in the life of the folks has been towards capital returns to shareholders.

We're going to continue to be thoughtful in the way we deploy capital.

And then on the on the affiliate question Jon So.

I think we are now through for this fiscal year all of our <unk>.

Significantly bar, maybe maybe one all of our.

Significant affiliate renewals would start again.

Very beginning of the next fiscal year of this summer with them.

With some important renewals, but for this fiscal we're through them.

The what we've seen in the renewals this past year.

Is.

The.

The importance really of our of our Fox brands with our.

Affiliate partners and the pricing power that we have with them and I think that's been pretty.

Very evident in all of our renewals today more and more like when you look at the split between.

Our cable affiliate revenue in our television affiliate revenue, we really negotiate those together so we can focus on the.

The TV half of that ledger, but you have to think about that.

The strength of these brands has a combined strength and where we where we are in the marketplace <unk>.

Our kind of our.

Best ability.

To push rate is where we do and thats been really on the on the TV side, the retransmission side of that ledger, but.

Strength of the portfolio that allows us.

Two two.

To do so.

Yes. So we're looking forward to continued success in our <unk>.

So as we get into the next fiscal year.

At this point, we are out of time, but if you have any further questions. Please give me or Dan Carey a call.

You again for joining us today, Thank you everyone.

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

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[music].

Ladies and gentlemen, thank you for standing by welcome to the Fox Corporation second quarter fiscal year 2023 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 the functionality for the question and answer queue will be given at that time, if you should require.

Operator, good morning, and welcome to our fiscal 'twenty two 'twenty three second quarter earnings call. Joining me on the call today are Lachlan Murdoch Executive Chair and Chief Executive Officer, John Nolan, 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.

Statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally.

And with that I'm pleased to turn the call over to Lachlan.

Thanks, Gabby and thank you all for joining us this morning to discuss our second quarter results.

Our fiscal second quarter continued to build upon the strength of the first quarter excuse me to deliver a record first half ratings and revenue at Fox.

Financially, we delivered a 4% increase in our top line, including 4% advertising revenue growth. Our EBITDA grew a massive 71% principally due to strong advertising results from sports and political as well as the impact of exiting Thursday night football.

Our television segment led this growth and had a truly stellar performance.

The stations group posted another record political midterm cycle with approximately $250 million booked during the first half of our fiscal year. This.

Fox Sports was also a key growth driver of this past quarter, where advertising pricing and demand remains solid on the back of viewership records for the NFL and for the World Cup by.

By every measure Fox sports as having an extraordinary year.

Fox is domination of the fall was led by four of our most prominent rights packages. The NFL Big 10, the Big 10 Network Major League baseball and FIFA, all coming together to produce a truly powerful schedule.

America's game of the week average just over 24 million viewers and is projected to be the most watched program of all of television for the 14th straight year.

And our Thanksgiving game. This year was the most watched regular season game ever on any network delivering 42 million viewers.

College football had its most watched season ever on Fox led by Big noon Saturday, which was the most watched college football window for the second straight year, while the annual Ohio State, Michigan rivalry was the most watched regular season College game on any network in 11 years.

The ratings were impressive but their revenue we generated was even better we wrote just shy of $250 million over the long weekend.

And the strength of Fox Sports has continued into the current quarter on the back of exciting play a football and what will be a record sold out Super Bowl This coming Sunday.

In fact to be had its highest quarterly viewership in the fiscal second quarter with total viewing time up 41% year on year, while December alone was the highest TVT and highest use of month ever.

These trends have continued early into the third quarter as to be adds viewers and content to the platform.

And Fox Entertainment, Rob Wade has settled into his new role as CEO and has already launched two of the season's biggest hits accused ranked as the most watched their debut on any broadcast or cable network in two years.

Special forces worlds toughest test is this season's number one unscripted program.

Further Fox Entertainment recently announced a multi year extension with Hulu.

Of our longstanding content licensing agreement, which bolsters Fox of streaming audience and provides Hulu with a key point of differentiation in a crowded streaming world.

And the Fox business network ended the quarter as the most watched business cable network, beating CNBC and total viewers during the business day and market hours for a third consecutive quarter.

Fox nation accelerated subscriber growth over the last quarter and last year and had the best quarter ever for engagement in terms of hours viewed no doubt driven by brilliant fresh content like Yellowstone $1 50.

It has been a truly strong quarter, one that showcases the very best of Fox and has shown that the underlying performance of Fox is exceptional exceptionally healthy.

Looking ahead into this third fiscal fiscal quarter, our topline will of course, the aided by a record Super Bowl, but we are still seeing solid national demand for our news and sports platforms growth in the <unk> and we are encouraged to see multiple AD categories pacing strongly positive at our local stations.

Before handing the call over to Steve.

Want to add some perspective to the Fox story.

Our ability to drive our business and execute our strategy is underpinned by a number of accomplishments.

For example, our affiliate and advertising revenue growth is driven by our pricing power reinforced by regularly delivering large scale audiences and uniquely providing exclusive content to our pay TV distributors.

This approach has led to nearly $2 billion in affiliate revenue growth and over $1 3 billion and advertising revenue growth since the spin in 2019.

By focusing on live content or core Fox brands have been able to run sharply counter to the broader trend of linear TV.

We can see this by looking at consumption trends.

Over the past 10 years consumption of Fox sports events is up 18% and consumption of Fox News is up 28%.

Our portfolio of sports rights is secure and is the best out there with the vast majority of them locked up for the foreseeable future.

Our NFL rights the single best package in all of television extend through 2033 season. We've just completed the first year of our major League baseball extension and renewed our big 10 rights, which each takes us out through the end of the decade.

We have the European championships through 2028, and another cycle with our FIFA World Cup rights.

These long term rights provide us the visibility necessary flexibility to plan, our businesses and pursue growth opportunities moving forward.

On the digital side, we've made calculated investments in areas, where we believe we can add significant value sports wagering and advertising video on demand are the two best examples of this.

We have a firm footing in the sports gambling space. We were the first among U S media companies to strike a partnership with bedding.

With a betting operator, because we see the potential for sports betting to drive engagement enhance the viewing experience and keep viewers coming back to Fox sports linear and digital platforms.

The various financial options and investments we have reflect our view that sports gambling as a long term play and we're focused on cementing our leadership in this rapidly evolving and high growth sector.

To be the number one Eva player leads our streaming strategy and with minimal investment when compared to our peers.

Revenue and engagement Kpis that too we have far exceeded our expectations and our consistently growing in healthy double digit range. Since we acquired it almost three years ago. The result of tubular proof that our strategy is working and we will continue investing in and growing this platform.

Finally, I'd like to address the recent announcement regarding news Corporation.

As you know my father, and I reach the conclusion that exploring combination with news Corp is not optimal for shareholders, a Fox or news Corps at this time.

As such the special committees were disbanded and no further time or action is being taken on this topic.

I've said in the past that I think scale provides flexibility and that it is important to be prepared when opportunities present themselves.

The rationale behind considering a combination of these core was about that scale flexibility synergies opportunities, great IP and above all creating value for all shareholders.

As the CEO of Fox.

I have never felt more confident about our strategy the quality of our assets and the strength of our financial position.

This confidence is clearly demonstrated by this morning's announcement to increase our share repurchase authorization to $7 billion.

With the immediate deployment of $1 billion of the expanded authorization toward an accelerated share repurchase transaction, while continuing our current in market purchases.

And now let me turn it over to Steve for more on the results.

Thanks, Leslie and good morning, everyone excuse me <unk>.

<unk> continued to deliver financially in the fiscal second quarter with total company revenue growth of 4% and 71% growth in EBITDA.

Additionally, as sports advertising was supported by a full roster of marquee events.

And to be continued to sustain its high growth trajectory.

Our affiliate revenues increased by 1% with limited renewal activity impacting the quarter and trailing 12 months subscriber losses remaining consistent at approximately 7%.

Quarterly adjusted EBITDA was $531 million up $220 million over the prior year. In addition to our revenue growth. We also benefited from lower expenses as a result of our early exit from the Thursday night football agreement.

Net income attributable to stockholders was $330 million or <unk> 58 per share up meaningfully against a net loss of $85 million or negative <unk> <unk> per share reported in the prior year period.

Alongside our growth in EBITDA, you will recall that our GAAP P&L is regularly impacted by the change in fair value of the Companys investment in Florida, which we recognized in other net.

Excluding this impact and other noncore items growth was strong with adjusted EPS of <unk> 48 per share up 35 against last year's setting cents per share.

Turning to our segments at TV, we delivered 6% revenue growth, including a 5% increase in advertising revenues.

As you know our advertising revenues in the December quarter of last year benefited from our coverage of Thursday night football.

On the NFL, specifically, we also benefited from strong pricing a record breaking Thanksgiving day broadcast and the timing of <unk> of the season sliding back into the December quarter.

Meanwhile, advertising revenue growth at <unk> was up 25% in the quarter and exceeded $200 million on the back of record levels of engagement.

And an uneven programmatic advertising marketplace, we are able to maintain cps and are well positioned to deploy more inventory as market conditions strengthen.

Television affiliate fee revenues were up 6% as healthy growth and pricing across all Fox affiliated stations continued to outpace the impact from subscriber declines.

Other revenues increased 26% in the quarter, primarily reflecting the consolidation of the prior year acquisition of my Vista.

These benefits were partially offset by higher costs from the World Cup and the annual growth in <unk> amortization, we see across our sports portfolio similar to the levels reported in our fiscal first quarter and net EBITDA investment in <unk> amounted to approximately $50 million in the December quarter.

At cable we saw revenues generally in line with the prior year cable advertising revenues were essentially flat as well.

However, this was offset by a softer direct to response marketplace that impacted Fox News media.

Cable affiliate fee revenues were broadly flat coming in at one 3 billion.

As we've signaled previously we are in the early days of our next distribution renewal cycle, where we expect revenue gains to be skewed towards the television segment.

Meanwhile, cable other revenues were up 7% in the quarter. Once again led by high in Fox Nation subscription revenues.

EBITDA at our cable segment was $353 million compared to this.

Compared to the $668 million reported last year, largely due to higher cost at the National Sports networks led by the World Cup and postseason baseball.

<unk> were also elevated at Fox News media due to the digital investments at nation, and weather and higher legal costs associated with ongoing litigation.

Now turning to cash flow were consistent with the normal seasonality of our working capital cycle, we recorded a free cash flow deficit of $610 million in the quarter.

From a capital deployment perspective fiscal year to date, we have repurchased $550 million by our share buyback program.

This takes the total cumulative amount repurchased 315 billion reps.

Representing 15% of that total shares outstanding since the launch of the program in 2019.

In addition, today, we declared a <unk> 25 semiannual dividend.

And as Lachlan mentioned this morning, we also announced an incremental buyback authorization of $3 billion.

Taking our total authorization to $7 billion.

We will immediately deploy $1 billion of this expanded authorization toward an accelerated share repurchase transaction, while concurrently continuing with our normal course buyback pacing, which would see its repurchase $450 million in additional shares across the remainder of the fiscal year.

These meaningful capital return measures are enabled by the strength of our financial position should we again closed the quarter with a very robust balance sheet, comprising $4 billion in cash and $7 2 billion in debt.

And with that let me turn it back together.

Thank you, Steve and now we would be happy to take questions from the investment community.

Youre using a speakerphone please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question. Please press one zero at this time and one moment. Please for your first question.

Your first question comes from the line of Robert Fishman from Moffett Nathanson. Please go ahead.

Hey, good morning, everyone Lachlan you've talked about the importance of scale in the media industry.

Hey, good morning, Robert Good to hear your voice.

For the question. So I think I do think scale is important.

As we look at sort of our growth going forward and.

Enhancing our growth opportunities I think scale is important but equally important.

Is the depth of our business. So we think about scale in terms of adding.

And broadening our sort of business some business lines, but also the depths of how we engage with our consumers and we will be investing I think.

But probably equally in both.

If we look at our strategy and how it is.

Performing.

You just have to look at our results. This quarter. Our results were really being truly stellar I think we stand out.

The media landscape certainly in this country in terms of the.

The health of our of our results and that goes to our strategy. We're very focused we're focused on.

On a core set of brands that are really more.

Must have brands in.

In the United States.

Media landscape. So so we like our strategy, we're absolutely focused on it but we will.

Pursue both scale and further investment in sort of the depth of our engagement with our consumers.

Your next question comes from the line of Jessica Reif Ehrlich from Bank of America Securities. Please go ahead, alright, Thank you and good morning.

Yes.

Two topics, but one can you give us some color on the advertising outlook.

Obviously, it'll be a great quarter with the Super Bowl, but just.

Besides that underneath that and then to be.

Maybe talk a little bit more about the drivers of growth I think you were adding Warner brothers discovery fast channels.

Steve said that something that you held back advertising.

What's going on with demand there, but how many minutes or you're selling and how many can you go up to.

Hey, Jessica good morning, So let me start with the advertising market and as you mentioned and obviously I don't believe I'll talk to the.

Kind of the outlook.

Advertising.

A year ago, or even a couple of quarters ago, but at the end of the day, we're still.

Hitting hitting our goals and achieving our revenue targets is just coming in late.

The and then look I think to be honest I think that goes to the strength of our portfolio I think being in news and being in sports.

And the leader in those two categories.

<unk>.

I think sets us apart.

In the advertising.

And the advertising marketplace from a lot of our peers. So I don't want to say that thats, our strength of our certainly our relative strength in advertising is not.

Indicative of the whole marketplace, but it's definitely indicative of our our brands and our ability to them to achieve our revenue.

<unk>, so they're super bowls to talk about some specifics as I said the money came in late so we had some nervous nervous moments.

But we will right just shy of gross <unk> got $600 million of revenue.

Next Sunday.

We are we are sold out it will be a record Super Bowl for US both in terms of total revenue and obviously in.

What we have achieved for you Charles each spot.

Ex the Super Bowl, if you back out the Super Bowl, we are still up in national advertising revenue.

And so I think that again bodes to them.

Certainly the strength of our brands and superpower.

Fox, but if I look at local stations Jessica categories, We're really happy to see a lot of categories back in their robust growth.

Auto.

Pacing up almost 30%.

Health up 30% pharmaceuticals up 45% travel up 60% and of course this is offset.

With categories like.

Crypto.

Money exchanges, I mean down 97%.

Still trying to find out who the 3%.

Advertising. So so there are some swings and roundabouts, but the key categories are back and back in a very in a very strong way.

So thats probably more than you wanted on advertising Jessica.

On <unk>.

Look all of our.

So I would say almost all of our Kpis.

Our record highs I think December at the end of December was actually, particularly strong year and term it out.

In terms of.

TVT and engagement.

Got that.

That audience that we are.

We have garnered.

<unk> and all of them.

Major studios continue to work with US I think we're seeing a benefit of people realizing that there.

Their libraries or sort of deep libraries, we can help them monetize those both library and so we are seeing you mentioned the the Warner Brothers deal, we're seeing everyone work with US which is why <unk> has the biggest.

TV and movie library in streaming anywhere in the world. So we're really very very pleased with them.

Next question please operator.

Your next question comes from the line of Phil Cusick from Jpmorgan. Please go ahead.

Hi, guys. Thanks.

I Wonder if you could talk about wagering Lachlan you discuss cementing year leadership today and last quarter I think you discussed potential volatility in that market, where do you see the market going at this point and how ideally would you like to see Fox involves thanks.

Look I think we have the.

The market we remain incredibly.

Excited and optimistic about about the wagering market going forward.

In this country.

Obviously, it will take some more time for <unk>.

Further states to be to be licensed.

And you'll start to see a shift from.

Wagering advertising and marketing shift from local markets to national markets. We're obviously.

Are incredibly well positioned on both sides to to capture.

Our.

Revenue from <unk>.

The wagering operators as they battle it out for us supremacy in each of their markets. So we've done extremely well the local stations.

I think we will see that shift to international markets, where I'm, obviously Fox sports and to some extent a Fox news in the Entertainment network, we'll continue to capture that revenue. So we're incredibly optimistic about.

<unk>.

From a corporate perspective, we're also.

The best positioned.

Media brand.

To continue to partner with our wagering.

Partners.

Particularly obviously the 18, 6% option that we have in <unk> is.

Sure.

Fantastic position to be in this we have about 10 year option I think we were about eight years to go on the option.

And flutter will be our partner for a long time, so we feel very well in terms of where we're positioned.

Next question. Please operator. Your next question comes from the line of Ben Swinburne from Morgan Stanley . Please go ahead.

Ask when Tom Brady is joining the Fox both sunlight is helping me.

Yeah.

And if you don't want to answer that one maybe just a couple of strategic questions picking up on Phil's.

What do you guys think the value of Fox bet is and what could that business or that asset.

Over the longer term and sort of.

The Bull case, and then you extended with Hulu not a huge shock, but just any comment on.

Whether that's enough of a needle mover financially or how robust the market was for for those for that content, because obviously thats a lot of licensing revenue potential just wondering if you could comment a little bit on how you approach that renewal and the outcome.

Thanks Pam.

Let me I'll answer the Tom Brady part of question.

Part of it I'll, let Steve talk to the value of our Fox bet and importantly, obviously, the the flutter <unk> option.

Let me.

<unk> be the first to congratulate Tom on a stellar career and congratulate him on his his retirement.

The whole Fox sports team.

Fox Corporation overall.

Really excited to have Tom.

Joined the team here that will be in the fall of next year 'twenty four.

It's going to take a little bit of time to decompress and.

Sure.

Well deserved after a such a stellar career.

Let me just quickly talk to Hulu.

The Hulu renewal.

<unk>.

Important very important to us and also very important to Hulu.

The kind of symbiotic relationship that we have with Hulu.

Rose in.

Efficacy as viewers.

More and more watch our content on a sort of catch up basis. So when we look at our hit shows we're not.

Monetizing them in the first window in the live urban live plus same day window as you all know in the same manner that we used to and so by being able to capture the.

The engagement after alive and same day or even live plus seven days is critically important in our Hulu deal really allows us to do that for Hulu It gives them.

Remainder is content the next day.

And they are able to.

I'd say sort of benefit from our piggyback on the marketing.

Spend in the reach that we give all of our content as we as we push it out so it works very well for Hulu.

And it works very well for us.

Steve you want to talk to the approximate value, yes listen on Fox bet.

We take a step back and just see out.

Bedding in totality in terms of the investments that Fox bet is one component of it and it's an important component we'd like to see it in more states in the four states had seen at the moment, but.

It's being operated by flooded Hubei the investment cost of that asset.

In some respects.

They have a history in terms of how they develop that.

But we look at it.

Clear market success in terms of Fox Pitt <unk> for us in terms of the way we have developed that can cross promoted that without stations.

Also it's not just Fox Pitt sports betting, but it also includes the puck as does.

Non sports betting asset so it's an important asset, but when we look at the totality of F.

<unk> position.

We increasingly think that the.

The option that we have a fine jewelry as to when that's really important for us as the leading market player. We have the opportunity over a long long period of time to take a very very meaningful stake in a play that's sort of add.

Head and shoulders market later right now.

Operator, we can go to the next question.

Next question comes from the line of Doug Mitchelson from Credit Suisse. Please go ahead.

Thank you.

Good morning Lachlan.

Where are you in the lifecycle for your digital investments I'm, just sort of curious when I think about to be pretty consistently been talking about growth every quarter on these calls and in engagement viewer and adding more content.

How much more.

Content is there to add how much more growth is there to drive it to be and same question on the Fox digital side. Thanks.

Thanks, Doug so in terms of the lifestyle kind of think about.

Sure.

The question in terms of the lifecycle for our digital investments I think.

Okay.

The reality is they are there.

Teenagers that are that are that are.

Putting on putting on muscle and.

And Greg growing on growing them pretty.

Pretty spectacularly so.

Look at <unk> as an example, and you think about the key metric we talked about now for several quarters is a total viewing time.

Total viewing time is.

So it's not like we went about it.

It's like it's like ratings or we can get.

We continue to grow total viewing time.

The the revenue that we're seeing follow that and we have 25% up in this quarter, which I think is pretty pretty pretty fantastic.

But the opportunity is much higher right because the total viewing time has grown faster at a much.

Bigger rate faster rate than they are than the revenue has so.

Already in within <unk>.

When we look at these metrics.

There is a.

Ripeness for four very significant revenue growth so.

So yes.

Digital investments are our adolescence, but there, but they are but they're a huge huge upside.

As they get older.

<unk>.

And then when you talk about Fox digital the digital assets now I was pretty amazed we went through some numbers.

Yesterday, just things like the local TV stations, the digital advertising business now with our local TV stations is really becoming quite significant so when we look across our whole portfolio and we push further into interim.

Our websites are our fast channels.

Our our apps. This revenue is becoming very significant and even in parts of the company that you are you wouldn't expect so.

So.

We believe the future of our business is obviously are digital and we're making that transition pretty rapidly and very robustly.

Operator, we have time for one more question.

That question comes from the line of John Hodulik from UBS. Please go ahead.

First question on the on the balance sheet.

Investors will definitely like the accelerated repurchase but $4 billion on the books.

Relatively low debt I mean, just maybe talk about sort of the usage of that cash I mean, how much cash you need on the books and maybe what the M&A environment looks like out there and what kind of opportunities you see and then on the affiliate line. You said you haven't seen the impact of the renewals.

Third third third.

You expect that Youll see over the renewals you will expect to do over the next couple of years.

When do you expect to sort of get into that sort of.

The wheelhouse and see that those lines really start to turn from renewables.

Thanks, John .

Steve jump in.

At any point, but.

Okay.

And now I'll start I'll start I'll start with Exxon.

First of all on the on the.

On the balance sheet and I think we do have an enviable balance sheet, we're going to deploy our capital as we have in a very disciplined.

Manner and entirely focused on shareholder returns for all of our all of our shareholders that'll be both as evidenced this morning.

With our accelerated share repurchase.

Which we think is a great sort of mechanism a strategy to return some of this capital to our to our shareholders.

But we will also obviously we'd be looking at.

M&A and other opportunities to use to deploy our capital against we don't have anything.

On the table today.

But we are I think in a store.

Strong position.

To capture opportunities when they present themselves and obviously there are.

Other companies in our sector that are that are not as greater position and will be things that will kind of share cast our eyes over so so.

We do expect the M&A will be part.

A more important part of our toolkit as we deploy capital, but we have nothing.

On the table in front of us today.

<unk>.

Before I go into affiliates to given again, just John I think if you fast forward like if we fast forward to the end of the fiscal based on the ice.

In a regular way share repurchases, we look down $4 6 billion in share repurchases by 30 June call. It.

You compare that against how much was deployed in M&A, which on a gross basis about 1 billion nine on a net basis. After asset sales is probably $5 million to $600 million. So you've been super balance Super disciplined on M&A and if anything the SKU. So far in the life of the folks has been towards capital returns to shareholders.

We're going to continue to be thoughtful in the way we deploy capital.

And then on the on the affiliate question Jon So.

I think we are now through for this fiscal year all of our significant bar, maybe maybe one all of our.

Significant affiliate renewals would start again.

Very beginning of the next fiscal year of this summer with them.

With some important renewals, but for this fiscal we're through them.

The what we've seen in the renewals this past year is.

The.

The importance really of our of our Fox brands with our.

Affiliate partners and the pricing power that we have.

With them and I think that's been pretty.

Very evident in all of our renewals today.

More and more like when you look at the split between.

Our cable affiliate revenue in our television affiliate revenue, we really negotiate those together.

So we've been focused on there.

The TV half of that ledger, but you have to think about.

The strength of these brands has a combined strength and where we where we are in the marketplace <unk>.

Or kind of.

Best ability.

To push rate is where we do and thats been really on the on the TV side, the retransmission side of that ledger, but.

Strength of the portfolio that allows us to.

To do that so yes.

Yes, so we're looking forward to continued success.

Affiliate renewals, so as we get into the next fiscal year.

Okay.

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

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

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