Q3 2024 Fox Corp Earnings Call

May 8, 2024

Okay.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation third quarter fiscal year 2024 earnings conference call. At this time, all participants are in a listen only mode.

Speaker Change: Ladies and gentlemen, thank you for standing by welcome to the Fox Corporation third quarter fiscal year 2024 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 functionality for the question and answer queue will be given at that time, if you should recall.

Operator: Later, we will conduct a question and answer session. I would like to emphasize that functionality for the question and answer queue will be available at that time. If you should require assistance during the call, please press star then zero.

Gabrielle Brown: Your 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. Scab. Your old Brown. Please go ahead Ms Brown.

Operator: 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.

Gabrielle Brown: Thank you, operator. Good morning, and welcome to our fiscal 2024 third quarter earnings. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Mallon, 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...

Gabrielle Brown: Thank you operator, good morning, and welcome to our fiscal 'twenty 'twenty four third quarter earnings call. Joining me on the call today are Lachlan.

Gabrielle Brown: Murdoch Executive Chair and Chief Executive Officer, John Nolan, Chief operating Officer, and Steve Tomsic, Our Chief Financial Officer.

Gabrielle Brown: 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.

Gabrielle Brown: These statements are based on management's current expectation 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.

Gabrielle Brown: 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 our SEC filings, which are available in the Investor Relations section of our website.

Gabrielle Brown: 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 filing. 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 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. Thank you, Gabby, and thanks, everyone, for joining us this morning.

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

Lachlan: Thank you Gabby and thanks, everyone for joining us this morning.

Lachlan Murdoch: This quarter, Fox continued to distinguish itself from its peers, delivering 7% EBITDA growth and demonstrating again the strength of our brands and the advantages of our strategy. This result is even more impressive when considering we are comping to last year's third quarter, which enjoyed a significant tailwind from Super Bowl LIV. In the fiscal third quarter, total affiliate revenue fees grew 4%, with positive growth at both our television and cable segments, driven by pricing benefits from our recent renewals.

Lachlan: This quarter Fox continued to distinguish itself from its peers deliver.

Lachlan: Delivering 7% EBITDA growth and demonstrating again, the strength of our brands and the advantages of our strategy.

Lachlan: This result is even more impressive when considering we are comping to last year's third quarter, which enjoyed a significant tailwind from Super Bowl 57.

Lachlan: In the fiscal third quarter total affiliate revenue fees grew 4% with positive growth at both our television and cable segments driven by pricing benefits from our recent renewals.

Lachlan Murdoch: Headline advertising revenues were down during the quarter, as expected, due to the absence of the Super Bowl and fewer NFL broadcasts than in the prior year. However, if not for the difference in our NFL postseason schedule, our total advertising revenues would have increased a few percent. Overall, advertising trends at Fox are clearly moving in the right direction, both in the scatter market and in early up-front discussions. Demand for sports remains robust, while trends at Fox News are improving across the board, including the fact that we have now fully lapped the direct response market issue that had adversely impacted Fox News DR revenue.

Lachlan: Headline advertising revenues were down during the quarter as expected due to the absence of the Super Bowl and fewer NFL broadcast than in the prior year.

Lachlan: If not for the difference in our NFL post season schedule. Our total advertising revenues would have increased a few percent.

Lachlan: Overall advertising trends at Fox are clearly moving in the right direction, both in the scatter market and an early upfront discussions.

Lachlan: Demand for sports remains robust while trends at Fox news are improving across the board, including the fact that we have now fully lapped. The direct response market issue that had adversely impacted Fox news Dr revenues.

Lachlan Murdoch: And while there wasn't much of a primary season this year, we do expect strong political advertising for national and local races, as well as local ballot issues, in the first half of our fiscal 25, which would largely benefit our station group. As we look to our annual upfront presentation next week, our focus on live content and must-watch events such as the coming presidential election cycle and next year's Super Bowl, combined with Tubi's position as the most-watched free TV and movie streaming service, will favor our enviable position with advertisers across the Fox portfolio. Operationally, Fox News again ended the third quarter as the most-watched cable network in total day and prime time.

Lachlan: And while there wasn't much of a primary season. This year, we do expect strong political advertising for national and local races, as well as local ballot issues in the first half of our fiscal 25, which would largely benefit our station group.

Lachlan: As we look to our annual upfront presentation next week, our focus on live content and must watch events, such as the coming presidential election cycle and next year's Super Bowl combined with <unk> position as the most watched free TV and movie streaming service will favor our enviable position with advertisers across the Fox poor.

Lachlan: Folio.

Lachlan: Operationally Fox News again ended the third quarter as the most watched cable network in total day and Prime time Fox.

Lachlan Murdoch: Fox News also strengthened its leadership position inside the category, gaining share to now again command 50% of total day viewers. These gains are underpinned by a dedicated team of journalists and staff who are focused on delivering coverage and insights on current events most relevant to our viewers. Building from our strength in primetime, we are expanding our leadership across dayparts, whether that be mornings with Fox & Friends, afternoons with The Five, or late nights with Gutfeld.

Lachlan: Fox News also strengthened its leadership position inside the categories gaining share to now again command, 50% of total debut on <unk>.

Lachlan: These gains are underpinned by a dedicated team of journalists and staff, who are focused on delivering coverage and insights on current events most relevant to our viewers.

Lachlan: Building from our strength in Prime time, we are expanding our leadership across day parts, whether that be mornings with Fox and friends afternoons with the five or late nights with gutfeld.

Lachlan Murdoch: And we expect this momentum to continue as we ramp up our election coverage heading into the fall. Tubi ended the third quarter with 22% revenue growth, driven by a 36% increase in total view time and 20% growth in monthly active users to just under 80 million MAU. Our expansive content library and our differentiated user base have solidified Tubi's position as the most watched free TV and movie streaming service in the U.S., with 1.6% of total TV viewing ahead of Peacock, Max, The Roku Channel, Paramount Plus, and Pluto TV, and only marginally behind Disney Plus.

Lachlan: And we expect this momentum to continue as we ramp our election coverage heading into the fall.

Lachlan: <unk> ended the third quarter with 22% revenue growth driven by a 36% increase in total view time and 20% growth in monthly active users to just under $80 million.

Lachlan: Our expansive content library, and our differentiated user base have solidified <unk> position as the most watched free TV and movie streaming service in the U S. With one 6% of total TV viewing ahead of Peacock Max the Roku channel, Paramount plus and Pluto TV and only me.

Lachlan: Marginally behind Disney plus.

Lachlan Murdoch: From its debut on the Nielsen Gauge in February of 23 to the most recent gauge in March of 24, Tubi's share of total U.S. TV view time grew 60 percent, which is faster than any other streaming service over that same period of time. Apart from just its growing scale, Tubi is also unique and uniquely valuable to advertisers through its reach and through its engagement. Over 60% of tubing users are classified as cord cutters or Cordenevers.

Lachlan: From its debut on the Nielsen gauge in February of 23 to the most recent gauge in March of 24 to be share of total U S. TB view time grew 60%, which is faster than any other streaming service over that same period of time.

Lachlan: Apart from just its growing scale to be is also unique and uniquely valuable to advertisers through which to reach and through its engagement.

Lachlan: Over 60% of to be users are classified as cord cutters or cord nevers.

Lachlan Murdoch: And 90% of those users' time watching is proactively on-demand, as opposed to passively watching a fast-track. This positions Toobie very well as an important part of the growing digital streaming advertising market. We are looking forward to showcasing Toobie's strengths at next week's Uppercut. Fox Sports had an impressive quarter with strength across all areas of our portfolio. We finished the 30th anniversary of the NFL on Fox on a high note with three NFC playoff games on Fox averaging an incredible 45 million viewers. This was capped with the NFC Championship Game drawing over 56 million viewers, which is 19% higher than last year's game and the most watched in over a decade.

Lachlan: And 90% of those users time watching is proactive proactively on demand as opposed to passively watching a fast channel.

Lachlan: Dispositions to be very well as an important part of the growing digital streaming advertising marketplace.

Lachlan: We are looking forward to showcasing to be strengths at next week's upfront.

Lachlan: Fox Sports had an impressive quarter with strength across all areas of our portfolio.

Lachlan: We finished the 30th anniversary of the NFL on Fox on a high note with three NFC playoff games on Fox, averaging an incredible 45 million viewers.

Lachlan: This was capped with the NFC championship game, drawing over 56 million viewers, which is 19% higher than last year's NFC Championship game and the most watched in over a decade.

Lachlan Murdoch: This season also reinforced Fox's solid position in college sports, with strong viewership in both college football and college basketball. In fact, in the current academic year, Fox aired the most-watched college football, men's college basketball, and women's college basketball games across the regular season. College sports has grown to become the second biggest source of Fox viewership behind only the NFL. Total consumption of college sports on Fox has grown by over 40% over the last 5 years. And in the March quarter, we launched the UFL, the United Football League, the result of the merger of the USFL and XFL.

Lachlan: This season also reinforced Fox solid position in college sports with strong viewership in both college football and college basketball.

Lachlan: In fact in the current academic year boxes are the most watched college football men's college basketball and Womens College basketball games across the regular season.

Lachlan: College sports has grown to become the second biggest source of Fox viewership behind only the NFL.

Lachlan: Total consumption of college sports on Fox has grown by over 40% through the last five years.

Lachlan: And in the March quarter, we launched the U F L. United Football League. The result of the merger of the Usfl and XFL.

Lachlan Murdoch: With this merger, the outlook for spring football is promising, and we are pleased with the results through the midpoint of the season. While the sports calendar in our upcoming fiscal fourth quarter tends to be quieter, Fox Sports is excited to present its Summer of Soccer, featuring over 200 hours of live soccer coverage across our platform, starting with the UEFA European Football Championship on June 14 and Copa America on June 20. This summer will also feature a new schedule from Fox Entertainment, with returning favorites like Gordon Ramsay's Food Stars and exciting new shows like the 1% Club.

Lachlan: With this merger the outlook for spring football is promising and we are pleased with the results through the midpoint of the season.

Lachlan: While the sports calendar in our upcoming fiscal fourth quarter tends to be quieter Fox sports is excited to present its summer soccer featuring over 200 hours of live soccer coverage across our platform starting with the UEFA European Football Championship on June 14th and Copa America on June 20th.

Lachlan: This summer will also feature a new schedule from Fox Entertainment with returning favorites like Gordon Ramseys food stars and exciting new shows like the 1% club.

Lachlan Murdoch: This follows a successful spring slate that featured two of the top five new primetime series in Krapopolis and The Floor, with Krapopolis ranking as the number one new primetime entertainment show and The Floor as the number one game show season to date. Last quarter, we announced the formation of a new sports-focused digital distribution platform with our partners Disney and Warner Bros.

Lachlan: This follows a successful spring slight that featured two of the top five new primetime series in crop populous and the floor with crap populous ranking as the number one new Primetime Entertainment show and the floor as the number one game show season today.

Lachlan: Last quarter, we announced the formation of a new sports focused digital distribution platform with our partners Disney and Warner Brothers Discovery.

Lachlan Murdoch: We are happy to have hired a truly world-class CEO in Pete Distad, and he is off to a flying start. In just several weeks, the JV now has over 150 engineers and executives dedicated to building a unique, innovative product that focuses on sports fans outside of the traditional TV bundle. We've already launched an internal beta service, which I have been trialing this past week.

Lachlan: We are happy to have hired a truly world class CEO and Pete just add and he is off to a flying start.

Lachlan: And just several weeks the JV now has over 150 engineers and executives dedicated to building a unique innovative product, which focuses on sports fans outside of the traditional TV bundle.

Lachlan: We've already launched an internal beta service, which I have been Trialing. This past week and I have to say, it's an incredibly exciting product and we can't wait to launch it this fall.

Lachlan Murdoch: And I have to say, it's an incredibly exciting product, and we can't wait to launch it this fall. Today's media market is certainly dynamic, but the strength and leadership of our brands and their capacity to monetize those strengths financially underscore our considered strategy. Underpinned by our best-in-class balance sheet, we ended the quarter with $3.8 billion in cash and just one times net leverage. We remain committed to driving long-term shareholder value creation through the thoughtful balance of managing our existing businesses, pursuing new adjacencies, and returning capital to our shareholders. And with that, I'll hand it over to you. Thanks, Lachlan, and good morning, everyone.

Lachlan: Today's media market is certainly dynamic, but the strength and leadership of our brands and their capacity to convert those strengths financially underscores our considered strategy.

Lachlan: Underpinned by our best in class balance sheet, we ended the quarter with $3 8 billion in cash and just one times net leverage.

Lachlan: We remain committed to driving long term shareholder value creation through the thoughtful balance of managing our existing businesses pursuing new adjacencies and returning capital to our shareholders.

Lachlan: And with that I'll hand, it over to Steve.

Steven Silvester Tomsic: Thanks, Lachlan and good morning, everyone.

Steven Silvester Tomsic: <unk> strategy continues to deliver solid results.

Steven Silvester Tomsic: Even with the comparison to a blockbuster NFL schedule as the prior year, we posted total revenues of $3 534 $5 billion.

Steven Silvester Tomsic: And grew adjusted EBITDA by 7% to $891 million.

Steven Silvester Tomsic: Total company affiliate fee revenues grew 4% over the prior year with growth with growth at both on television and cable segments supported by our recent cycle of affiliate renewals.

Steven Silvester Tomsic: Reflecting the event-driven nature of our business, advertising revenues on a headline basis were down $34 per share, as we compared against last year's broadcast of the Super Bowl, along with two less NFL playoff broadcasts in the current year quarter. As Lachlan just mentioned, if not for the impact of these NFL schedule items, total company advertising revenues would have grown in low single digits. Total company other revenues were down 22% versus the prior year, primarily due to the timing of sports sub-licensing revenues, which were more weighted towards our fiscal second quarter this year.

Steven Silvester Tomsic: Reflecting the event driven nature of our business advertising revenues on a headline basis were down 34% as we compared against last year's broadcast of the Super Bowl along with two less NFL playoff broadcasts in the current year quarter.

Lachlan: As Lachlan just mentioned if not for the impact of these NFL schedule items total company advertising revenues would have grown low single digits.

Lachlan: Total company and other revenues were down 22% versus the prior year, primarily the result of the timing of sports of licensing revenues, which were more weighted towards our fiscal second quarter. This year.

Steven Silvester Tomsic: Total company expenses fell 21% year-over-year, primarily as a result of the NFL postseason schedule differences I just mentioned. Net income attributable to stockholders of $666 million, or $1.40 per share, compared to a net loss of $54 million, or negative 10 cents per share, reported in the prior year period. This year-over-year variance reflects the growth in EBITDA, as well as the absence of last year's Fox News media litigation chart and a current quarterbook gain on the merger transaction of the USFL, which has now been deconsolidated in connection with the formation of the United Football League. Excluding these and other non-core items, adjusted EPS was $1.09, up 16% against last year's $94.

Lachlan: Total company expenses fell 2021% year over year, primarily primarily a result of the NFL post season scheduled differences I just mentioned.

Lachlan: Net income attributable to stockholders of $666 million or $1 40 per share compares to the net loss of $54 million or negative <unk> 10 per share reported in the prior year period.

Lachlan: This year over year variance reflects the growth in EBITDA as well as the absence of last year's Fox News Media litigation charge in the current quarter gain on the merger transaction in the U S. F L, which is now being deconsolidation in connection with the formation of the United Football League.

Lachlan: Excluding these and other noncore items adjusted EPS was $1 nine up 16% against last year's <unk> 94 things.

Steven Silvester Tomsic: Now let's turn to our segment. At Cable, revenues were $1.47 billion, down 6% from the prior year quarter, while EBITDA grew $3.3 billion. Cable affiliate fee revenues were up 1%, with growth in pricing from our distribution renewals outpacing the impact from industry subscriber declines running in the mid-8% range. Cable advertising revenues fell by 6% or $20 million. At the national sports networks, advertising revenues were down due to the absence of last year's Super Bowl-related programming and the World Baseball Classic.

Speaker Change: Now, let's turn to our segment results.

Lachlan: At cable revenues were $1 47 billion down 6% from the prior year quarter, while EBITDA grew 3%.

Lachlan: Affiliate fee revenues were up 1% with growth in pricing from our distribution renewals outpacing the impact of from industry subscriber declines running in the mid 8% range.

Lachlan: Yes.

Lachlan: Cable advertising revenues fell by 6% or $20 million.

Lachlan: At the National Sports networks advertising revenues were down due to the absence of last year's Super Bowl related programming and the World Baseball Classic at Fox News AD revenues were impacted by moderating direct response pricing declines and lower digital traffic, partially offset by higher national pricing.

Steven Silvester Tomsic: At Fox News, ad revenues were impacted by moderating direct response pricing declines and lower digital traffic, partially offset by higher national prices. Cable other revenues decreased $89 million, primarily a result of the timing of sports sub-licensing revenues, which were more weighted towards our fiscal second quarter. Cable expenses were 16 percent lower than the prior year, primarily due to the timing of the Associated Sports sub-licensing expenses, lower costs at Fox News, and the deconsolidation of the USFL. All in, and despite segment revenues being down 6%, quarterly adjusted EBITDA at Cable grew 3% over the prior year quarter to reach $819 million.

Lachlan: Cable other revenues decreased $89 million.

Lachlan: Primarily a result of the timing of sports sub licensing revenues, which were more weighted towards our fiscal second quarter.

Lachlan: Cable expenses was 16% lower than the prior year, primarily due to the timing of the associated sports sub licensing expenses lower costs at Fox news and the deconsolidation of the UHF out.

Lachlan: All in and despite segment revenues being down 6% quarterly adjusted EBITDA at cable grew 3% over the prior year quarter to reach $819 million.

Steven Silvester Tomsic: Turning to our television segment, revenues were $1.94 billion, down 22% from the prior year, while EBITDA increased 24%. TV affiliate fee revenues grew 9% over the prior year, as price increases across our owned and operated, as well as third-party Fox-affiliated stations, more than offset the impact from subscribers. As mentioned previously, TV advertising revenues were impacted this quarter by the composition of our post-season NFL schedule, namely the absence of last year's Super Bowl and two less NFL playoff games.

Lachlan: Turning to our television segment, where revenues were $1 94 billion down.

Lachlan: Down 22% from the prior year, while EBITDA increased 24%.

Lachlan: Television affiliate fee revenues grew 9% over the prior year as price increases across our owned and operated as well as third party folks affiliated stations more than offset the impact from subscriber declines.

Lachlan: As mentioned previously television advertising revenues were impacted this quarter by the composition of that post season, NFL schedule, namely the absence of last year's Super Bowl and two less NFL playoff games as a result on a headline basis TV advertising revenues were down 40%.

Steven Silvester Tomsic: As a result, on a headline basis, TV advertising revenues were down 40%, while other revenues increased $13 million, primarily the result of the timing of deliveries from our entertainment production company. While total TV revenues were down versus the prior year, this was more than offset by a 24% decrease in TV expenses. The ratings were lower in the quarter, primarily due to the impact of the NFL schedule, along with fewer hours of original scripted primetime content, including the impact of the industry labor dispute.

Lachlan: TD other revenues increased $38 million, primarily the result of the timing of deliveries from our entertainment production companies.

Lachlan: While total television revenues were down versus the prior year. This was more than offset by 24% decrease in TV expenses.

Lachlan: Fences were lower in the quarter, primarily due to the impact of the NFL schedule, along with fewer hours of original scripted primetime content, including the impact of the industry labor disputes.

Steven Silvester Tomsic: All in, we delivered quarterly adjusted EBITDA at the TV segment of $145 million, up 24% over the prior year quarter. Turning to cash flow, where we generated strong free cash flow of $1.39 billion in the quarter, reflecting our normal seasonal cycle of collecting advertising revenues from our fall programming, coupled with our major sports rights payments being concentrated in the first half of our fiscal year. From a capital return perspective, from the commencement of the third quarter through today, we've repurchased $300 million under our share buyback program, along with returning nearly $125 million to our shareholders via our semi-annual dividend payment. Our total cumulative buyback activity since the launch of the program in 2019 now amounts to $5.4 billion, or 26% of our total shares outstanding, and we remain committed to fully utilizing our current $7 billion authorisation.

Lachlan: All in we delivered quarterly adjusted EBITDA at the TV segment of $145 million up 24% over the prior year quarter.

Lachlan: Turning to cash flow, where we generated strong free cash flow of $1 three 9 billion in the quarter, reflecting our normal seasonal cycle of collecting advertising revenues from a full programming coupled with a major sports rights payments being concentrated in the first half of the fiscal year.

Lachlan: From a capital return perspective from the commencement of the third quarter through today, we have repurchased $300 million under our share buyback program, along with returning nearly $125 million to our shareholders via a semiannual dividend payment.

Lachlan: A total cumulative buyback activity since the launch of the program in 2019 now amounts to five 4 billion.

Lachlan: Or 26% of that total shares outstanding and we remain committed to fully utilizing our current 7 billion dollar authorization.

Gabrielle Brown: These capital return measures are supported by our robust balance sheet, where we ended the quarter with $3.8 billion in cash and $7.2 billion in gross debt. And with that, I'll turn the call back over to Gabby to open the Q&A.

Lachlan: These capital return measures are supported by a robust balance sheet, where we ended the quarter with $3 8 billion in cash and $7 2 billion in gross debt and with that I'll turn the call back over to Gabby to open the Q&A great. Thanks, Steve.

Operator: And now, we'll be happy to take questions from the investment community. Ladies and gentlemen, I'd like to emphasize the functionality of the question and answer queue. If you wish to ask a question, please press 1 and 0 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by once again pressing 1 and 0.

Gabby: And now happy to take questions from the investment community.

Operator: If you're 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 1 and 0 at this time. And one moment, please, for your first question. Your first question comes from the line of John Hodulik from UBS. Please go ahead. Great, thank you.

Gabby: 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 U may Russo remove yourself from queue at any time by once again pressing one zero if youre using a speakerphone please pick up the handset before.

Gabby: The numbers that has been requested that you limit yourself to one question. Once again, if you have a question. Please press <unk> zero at this time and one moment. Please for your first question.

Lachlan: Okay.

Lachlan: Your first question comes from the line of John Hodulik from UBS. Please go ahead.

John Hodulik: And good morning, everyone. Strong growth again at 2B. I guess, a couple questions on that. First, what's driving the growth in TVT? Any color you guys can provide on CPMs?

John Hodulik: Great. Thank you and good morning, everyone.

John Hodulik: Strong growth again at <unk> I guess, a couple of questions on that I mean, first what's driving the growth and TVT Annie.

John Hodulik: Any color you guys can provide on CPM Disney yesterday.

Lachlan Murdoch: Disney yesterday gave a little color on some weakness in connected TV CPMs. And then three, any color you can provide on dilution at 2B and maybe how you guys view future profitability of that business. Thanks very much, John. I'll start. I'm not quite sure I understand what you mean by dilution at Tubi, but let me start with the other two.

John Hodulik: A little color on some weakness in connected TV CPM and then three any color you can provide on dilution at <unk> and maybe how you guys view future profitability of that business.

Speaker Change: Thanks, very much John.

Speaker Change: So let me ill start im not quite sure why.

Speaker Change: I understand you mean by dilution of TUI, but let me let me start with the other two.

Lachlan Murdoch: The growth at Tubi continues to be incredibly strong. I think TVT growth comes from both new subscribers and new viewers finding the platform. As you know, we've very efficiently been marketing the platform to bring more people to it, and it's becoming a wider and wider known and loved brand in the marketplace. And the reason for that is, you know, we talked about it on calls before, you know, with 250,000 movies and television series on the platform and now over 250, in fact, I think around 270 live fast channels on the platform. It really does offer a tremendous product for everyone who's utilizing it.

Speaker Change: The growth.

Speaker Change: The growth to be continues to.

Speaker Change: Two to be incredibly strong.

Speaker Change: I think TVT growth comes from both new subscribers.

Speaker Change: New viewers are finding the platform.

Speaker Change: As you'd be aware.

John Hodulik: <unk>.

Speaker Change: Very good.

Speaker Change: Efficiently being been marketing the platform to bring more people onto it and it's becoming.

Speaker Change: Wider and wider known and loved brand in the marketplace.

Speaker Change: And the reason for that is we have we've talked about on calls before with 250000.

Speaker Change: Movies and television.

Speaker Change: Series on the platform and now over 250 in fact, I think around 270 alive fast channels on the platform. It really does offer a tremendous sum product.

Speaker Change: For everyone Who's who is utilizing it but it's very interesting because.

Lachlan Murdoch: But it's very interesting because, of all those fast channels and all those 250,000 movies and TV series, 90% of the viewing comes on demand. And this is very important because when that viewing comes on demand, and it's proactively on demand as opposed to passively sort of sitting back and watching a fast channel, that's much more valuable to advertisers. And it certainly is something that we're going to make a big deal about at our up-front presentations next week. So because of that, we are very confident we can hold our CPMs to it. We're already very efficient with our CPMs.

Speaker Change: Although all of those fast channels on all of those those during 2000 movies and.

Speaker Change: <unk>.

Speaker Change: Tvs years, 90% of the viewing comes on demand and this is very important because when the viewing comes on demand and its proactively on demand as opposed to passively sort of sitting back and watching your fast channel that's much more valuable to advertisers and it certainly is something that we're going to make a big deal about at our upfront presentations.

Speaker Change: Next week.

Speaker Change: So because of that we are very confident we can hold our cpm's <unk>, we're already very efficient with our Cps.

Lachlan Murdoch: I think some of our competitors priced themselves when they entered the AVOD market over the past 12 and 18 months very high, and we're seeing in the marketplace them having to drop CPMs as new entrants add supply to the market. So that's affecting the market overall. It certainly has an impact on the market for advertising for Tubi. But from a CPM point of view, it's not really going to be a big impact on us.

Speaker Change: I think some of our competitors priced themselves when they entered the <unk> market over the past 12, and 18 months are very high.

Speaker Change: We're seeing in the marketplace them, having a drop cpm's as new entrants.

Speaker Change: Add supply to the market so that's affecting the market overall.

Speaker Change: It certainly has an impact on the on the market for advertising for <unk>.

Speaker Change: But from a CPM point of view, it's not really going to be a big impact to us I should just say, though that next quarter, we are going to be.

Lachlan Murdoch: I should just say, though, that next quarter, we are going to be facing difficult comps in the fourth quarter. I think if you remember this time last year, Tubi was up 47% in revenue, and that's going to be a very difficult comp for us next quarter. So there will be some headwinds for the whole marketplace, but from a comp point of view for Tubi as well in the next quarter. So that's just a slight word of caution. Your next question comes from the line of Robert Fishman from Moffitt. Please go ahead. Hi, good morning, everyone.

Speaker Change: Facing difficult comps in the fourth quarter I think if you remember this time last year <unk> was up 47%.

Speaker Change: In revenue and that can be a very difficult comp.

Speaker Change: For us on next quarter, so there will be.

Speaker Change: Sure.

Speaker Change: Some headwinds are.

Speaker Change: But for the whole market by spot, but from a comp point of view for <unk> as well and in the next quarter. So that's just our.

Speaker Change: Slight a word of caution.

Speaker Change: Your next question comes from the line of Robert Fishman from <unk>. Please go ahead.

Robert S. Fishman: Given all the press about the NBA negotiations underway, I'm just curious if you can think a little bit as far as your broader sports rights go. And how do you think about the value of the Fox Broadcast Network as you negotiate those future sports rights? And then the flip side of that is, do you feel like you're at a competitive disadvantage without your own SVOD service to compete for future rights? And then, if I can just separately, given all the M&A discussions in the industry, what are your latest thoughts on monetizing some of your strategic non-core assets like your FanDuel option and StudioLot? Thank you.

Robert S. Fishman: Hi, good morning, everyone.

Robert S. Fishman: Given all the press about the NBA negotiations underway I'm just curious if you can think a little bit.

Robert S. Fishman: As far as your broader sports rights go.

Robert S. Fishman: And how do you think about the value of Fox broadcast network as you negotiate those future sports right and then the flip side of that is do you feel like youre at a competitive disadvantage without your own outside service to compete for future right.

Speaker Change: And then if I can just separately.

Speaker Change: Given all of the M&A discussion in the industry. What are your latest thoughts on monetizing some of your strategic non core assets like your fan to option and studio a lot. Thank you.

Lachlan Murdoch: Thanks, Roger. So with the NBA, obviously, I can't sort of comment on other people's negotiations and where that may or may not end up. But in terms of how we think about it affecting the value of the Fox network and our sports portfolio, we're very happy with our sports portfolio. We obviously look at..., you know, rights packages as they come up, but we see them as a portfolio or a bouquet of sports rights that we have, and we feel very strong with the current portfolio that we have, which is one of the reasons why we didn't pursue the NBA in this round of negotiations.

Speaker Change: Thanks, Roger so so with the <unk>, obviously, I cant sort of comment on other people's sort of negotiations and where that may or may end up in terms of how we think about it affecting the value of the Fox network and our sports portfolio, we're very happy.

Robert S. Fishman: With our support sports portfolio.

Robert S. Fishman: If you look at them.

Robert S. Fishman: <unk>.

Robert S. Fishman: Rights packages as they come up but on but we see them as a <unk>.

Robert S. Fishman: As a as a portfolio or a bouquet of sports rights that we have and we feel very.

Robert S. Fishman: <unk>.

Robert S. Fishman: Strong.

Robert S. Fishman: The current portfolio portfolio that we have which is one of the reasons why we.

Robert S. Fishman: We didn't pursue the MBA in this.

Robert S. Fishman: In this round of negotiations, but I think it does go to the value of broadcast television.

Lachlan Murdoch: But I think it does go to the value of broadcast television, because sports leagues still need reach that is still incredibly important for them, for them to drive their fan bases, to get the maximum amount of viewership for their games and matches.

Robert S. Fishman: Because sports leagues still need reach reaches that is still incredibly important for them for them to drive their fan bases for them.

Robert S. Fishman: If you get the maximum amount of viewership armed to their games and matches and so the value of the Fox network and frankly are strategically kind of our position our station group to any sports League.

Lachlan Murdoch: And so the value of the Fox network and, frankly, our strategically positioned station group to any sports league only increases over time is what we're seeing. And therefore, I don't think, coming to the second part of your question, I don't think we are strategically disadvantaged with not having a subscription video on-demand service because we have found in the past that we can partner with others. Well, frankly, the leagues tend to partner with others.

Robert S. Fishman: Only only increases over time is what we're seeing.

Robert S. Fishman: And therefore, I don't think coming off the second part of your question.

Robert S. Fishman: I don't think we are strategically disadvantaged with not having a subscription video on demand service because we've found in the past, we can partner with others, well frankly, the leagues tend to partner with others.

Lachlan Murdoch: We can take the rights where we can broadcast to the most number of Americans possible, and they can allocate rights to SVODs as needed. But they're never going to be able to live entirely without a broadcast network and broadcast.

Robert S. Fishman: We can take the.

Robert S. Fishman: The rights, where we can we can broadcast of the most amount of Americans possible.

Robert S. Fishman: And they.

Robert S. Fishman: They can they can.

Robert S. Fishman: <unk> rights to to asphalt as needed, but they're never going to be able to live entirely without a broadcast network and broadcast distribution.

Lachlan Murdoch: Yeah, so Robert, just in terms of the M&A picture, like our posture on sort of what you term non-core assets, like we're strong believers in the sports betting market in this country. We read with interest your note that put a billion-dollar value on it, and so now our intention is to see that through and eventually exercise it. And then the studio lot, we think, is a long-term asset for us. We have development plans for that, and so we don't have any change in posture around early monetisation of those assets. We think they're incredibly valuable.

Robert S. Fishman: M&A.

Robert S. Fishman: So Robert just in terms of the M&A picture lab posture.

Robert S. Fishman: So it is what.

Robert S. Fishman: He term noncore assets like <unk> with strong believers in the sports betting market.

Robert S. Fishman: In this country.

Robert S. Fishman: Read with interest you will note that would've been in dollar value on it.

Robert S. Fishman: Now our intention is to say that through and eventually exercise.

Robert S. Fishman: And in the studio look we think is a long term asset for US we have development plans for that and so.

Robert S. Fishman: Don't have any change in posture around early monetization of those assets. We think they are incredibly valuable for the long term.

Lachlan Murdoch: And I just remind you, it's not only the value of the option but also the equity that we have in Flutter, which is today worth over $900 million. Next question, please, operator. Your next question comes from the line of Ben Swinburne from Morgan Stanley. Please go ahead. Thanks. Good morning.

Robert S. Fishman: I'd just remind you it's not only the value of the of the option, but also the equity that we have in Florida, which is today worth over $900 million.

Speaker Change: Next question please operator.

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

Benjamin Daniel Swinburne: Thanks, Good morning.

Benjamin Daniel Swinburne: Lachlan, just sort of a question around kind of your products coming to market, the streaming JV, and also maybe how Tubi might fit in. Any more you can share with us on sort of what you think is really differentiated about the product? We haven't seen it yet. You have.

Benjamin Daniel Swinburne: Lots on a just a sort of a question around kind of your products coming to market. The streaming JV and also maybe how <unk> might fit in.

Benjamin Daniel Swinburne: Any more you can share with us on sort of what your what do you think is really differentiated about the product we haven't seen it yet you have.

Lachlan Murdoch: And I noticed on the Disney deck yesterday that it says that a definitive agreement hasn't been signed yet. I didn't know if there was something holding it up or if that meant anything or any update on sort of the go-forward plan. And then I'm wondering, Tubi, with its reach as an app-based service, is that an opportunity for maybe bundling the JV product or merchandising it in some way? You have a pretty interesting direct customer relationship with Tubi. I know it's a different kind of product offering, but I was curious if you'd thought about leveraging that asset or those two assets together to create more value for the company. Thanks a lot.

Benjamin Daniel Swinburne: Sure.

Benjamin Daniel Swinburne: And I noticed in the Disney deck yesterday that it says that.

Speaker Change: Affinitive agreement hasn't been signed yet so I didn't know.

Speaker Change: If there was something holding it up or was that meant anything or any update on sort of the go forward plan.

Speaker Change: And then I'm wondering <unk> with its reach as an App based service is that an opportunity for maybe bundling the JV product or merchandising in some way you have a pretty interesting direct customer relationship with <unk> I know, it's a different kind of product offering, but I was curious if you've thought about.

Speaker Change: Leveraging that asset or those two assets together to create more value for the company. Thanks a lot.

Lachlan Murdoch: Thanks very much, Ben. So, first of all, as I said, I've actually got... In the room behind me, I've got the beta version of the streaming app, and I don't think we've announced the name yet, so I won't inadvertently do it on this call, I hope, not yet anyway. But look, it's something that we've been able to engage with, and it is really looking tremendously exciting, as I said in my comments.

Speaker Change: Thanks, very much Ben So first of all as I said I've got actually.

Speaker Change: In the room behind me I've got that.

Speaker Change: The beta version.

Speaker Change: The.

Speaker Change: Streaming App and I don't think we've announced the name yet.

Speaker Change: And importantly, do it on this call I hope not yet anyway and.

Speaker Change: But it didn't look it's something that we've been able to.

Speaker Change: Yeah.

Speaker Change: Engage with and it is really looking.

Speaker Change: Tremendously exciting as I said in my comments.

Lachlan Murdoch: It's a very innovative product, designed to be entirely focused on core cutters, people who are not in the cable bundle and who frankly won't be able to compare it to a tier of live channels. It's a very different digital first product, which when you eventually get it and get to be groundbreaking, certainly in this country, it really is.

Speaker Change: It's a it's.

Speaker Change: Very innovative.

Speaker Change: It's designed to be.

Speaker Change: Entirely focused on.

Speaker Change: Yes.

Speaker Change: Cord Nevers cord cutters people, who are not in the in the in the cable bundle and you frankly can't won't be able to compare it to.

Speaker Change: <unk>.

Speaker Change: A tier of live channels, it's a very different digital first product.

Speaker Change: Which when you eventually.

Speaker Change: Get it and get get get to enjoy it.

Speaker Change: Understand.

Speaker Change: How.

Speaker Change: Groundbreaking certainly in this country it really is.

Lachlan Murdoch: In terms of speed, you know, everyone is running at a sort of full pace to get the product finished and delivered. Obviously, there's the fun side of it, which is like the user interface and how you use it, which has been great to use, but there's a ton of work obviously in engineering behind that, in ingesting content from multiple partners and being able to combine that into one sort of seamless platform.

Speaker Change: In terms of the speed.

Speaker Change: Everyone is is are running at a sort of full pace to get the product.

Speaker Change: Our finished and.

Speaker Change: And delivered obviously there is the.

Speaker Change: Yeah.

Speaker Change: The fund side of it which is like the user interface and how you use it which has been great to us, but there's a ton of work, obviously and engineering behind that ingesting.

Speaker Change: Content from multiple multiple partners.

Speaker Change: And being able to combine that into India into one seamless platform. So theres a tremendous amount of work that's being done.

Lachlan Murdoch: So there's a tremendous amount of work that's being done to get us over the line this autumn, but we're incredibly excited. And so I wouldn't read anything into the final deal terms being signed; it's just a matter of everyone running on all cylinders to get this done. Oh, and Tubi. Tubi is a very different product.

Speaker Change: Get them.

Speaker Change: They get us over the line in other this autumn, but we're incredibly excited and so theres no I wouldn't read anything into them.

Speaker Change: Final.

Speaker Change: Deal terms being them being signed.

Speaker Change: A matter of everyone running on all cylinders to get finished.

Speaker Change: Our <unk> sorry on the <unk>, we don't see tubular very different product, we don't see.

Lachlan Murdoch: We don't see an opportunity at this stage, or we haven't contemplated an opportunity at this stage to bundle the sports service with Tubi. I think it makes potentially more sense to bundle sports with other SVOD services, which you'll likely see as we go forward. Next question, please. Your next question comes from the line of Jessica Ehrlich from Bank of America. Please go ahead.

Speaker Change: Sure.

Speaker Change: An opportunity at this stage, we haven't contemplated opportunity at this stage to bundle.

Speaker Change: Sports service with <unk>.

Speaker Change: I think it makes potentially more sense to bundle sports with other <unk> services.

Speaker Change: You'll likely see as we go forward.

Speaker Change: Next question please.

Speaker Change: Your next question comes from the line of Jessica Ehrlich from Bank of America. Please go ahead.

Jessica Reif Cohen: Thank you. A couple questions. First, on political advertising, Lachlan, you seem pretty confident that it will come back, but I guess the question is really, will it come back to linear the way it has in the past, and what's your overall outlook? Second, on M&A, you may have the strongest balance sheet in the industry, so I was just wondering about the opportunities you see out there. And then finally, just a follow-up on 2B, which has... I mean, it's got such incredible momentum.

Jessica Reif Cohen: Thank you a couple of questions first on political advertising.

Jessica Reif Cohen: Hello can you seem pretty confident that it will come back but.

Jessica Reif Cohen: I guess the question is related to but we'll come back to linear or the way. It has in the past and what's your overall outlook.

Jessica Reif Cohen: Second on M&A.

Jessica Reif Cohen: May have the strongest balance sheet in the industry. So I was just wondering if you could explore.

Jessica Reif Cohen: What opportunities you see out there that seems to be a lot of things going on in the industry and then finally, just a follow up on <unk>, which has.

Jessica Reif Cohen: Such incredible momentum, you've really pulled away from certainly all the other sales channels and competing with the big box channels.

Lachlan Murdoch: You've really pulled away from all the others, certainly all the others, I guess by company channels or network platforms. What does it look like over the next three years? Great. Thanks, Jessica.

Jessica Reif Cohen: Platforms.

Jessica Reif Cohen: What does it look like over the next three years or so.

Lachlan Murdoch: So, let me start with politics. You know, we are confident. We obviously were disappointed for multiple reasons that there wasn't a more competitive primary season.

Speaker Change: Great. Thanks, Jessica.

Speaker Change: So on let me start with them.

Speaker Change: Political.

Speaker Change: We are confident we can obviously we're disappointed.

Speaker Change: Multiple reasons that there wasn't a more.

Speaker Change: <unk>.

Speaker Change: Competitive.

Speaker Change: Primary <unk>.

Speaker Change: Isn't.

Speaker Change: But.

Speaker Change: We certainly know this is an.

Speaker Change: On election, which.

Speaker Change: Both sides of politics are all sides of politics are very focused on it.

Speaker Change: Raised a tremendous amount of money and that money.

Speaker Change: Will will flow ultimately to them to local local television.

Speaker Change: And we are.

Lachlan Murdoch: One of the reasons we're confident, in addition to the amount of money that we know has been raised, is just the position of our stations, specific stations within the group, and how that aligns with the political map. If you look at the tight, so putting aside the presidential election, everyone focuses on a call to talk about national trends, and people focus on the presidential election, but you have to look below the presidential election and look at sort of Senate races.

Speaker Change: Extremely confident of that.

Speaker Change: One of the reasons. We're confident in addition to the amount of money that we know has been raised or are just the position of our of our station specific stations within the group and how that aligns with the political map. If you look at the tight so putting aside presidential election everyone's focus for focuses on Athena.

Speaker Change: Call to talk about sort of national trends and people focus on presidential but you have to look below presidential.

Lachlan Murdoch: So we have tight Senate races in key markets where we have big stations. And you have to remember, Jessica, these are big news stations, right? And political money tends to run alongside news, local news. And so there are tight races in Arizona, in Michigan, these are for the Senate, in Michigan, tight races, Senate races in Pennsylvania, and in Wisconsin.

Speaker Change: And look at sort of Senate races. So we have tight Senate Senate races.

Speaker Change: In key markets, where we have a big stations and you have to remember Jessica These are big new stations, right and political money tends to run.

Speaker Change: Ron.

Speaker Change: Alongside news on local news and so theres tight races in Arizona.

Speaker Change: In Michigan. These are for Senate in Michigan tie races Senate race in Pennsylvania and in Wisconsin.

Lachlan Murdoch: And also, of course, our DC station will benefit from a tight race in Maryland. In addition, you've got a lot of issues on the ballot in different markets. So Arizona, Florida, I think Maryland, again, all have a lot of issue money flowing into those on the ballot.

Speaker Change: And also of course, our D C station.

Speaker Change: We'll benefit from tight race in Maryland.

Speaker Change: And Additionally, you've got a lot of issues on the ballot in different markets, So Arizona, Florida.

Speaker Change: I think Maryland again, all have a lot of issue money flowing into those into those onto onto the ballot. So we think it's going to be an incredibly strong.

Lachlan Murdoch: So, you know, we think it's going to be an incredibly strong political season. It's just starting later than we had originally expected than you traditionally have when you have a primary, a more contested primary, um... So you'll start to see the benefit of that in the first half of our next fiscal, fiscal 25 for us. The next question on M&A and the balance sheet, I agree wholeheartedly. I think we have the best balance sheet in the industry.

Speaker Change: Political season.

Speaker Change: It's just starting later than we had we had first expected than you traditionally have when you have.

Speaker Change: Our primary.

Speaker Change: More contested primaries.

Speaker Change: <unk>.

Speaker Change: So you'll start to see the benefit of that in the first half of our next fiscal fiscal 'twenty five.

Speaker Change: For us.

Speaker Change: The next question on M&A and the balance sheet I agree wholeheartedly I think we have the best balance sheet.

Speaker Change: In the industry. So I think thats the math just that's just a fact.

Lachlan Murdoch: And so, you know, we continue to look for creative opportunities that would align with our kind of strategic goals and initiatives, and we'll continue to do that. We obviously don't want our balance sheet to go to waste, but we haven't found anything yet that we're going to do or follow. But it is something we are keeping a close eye on. Um, and then on Tubi. How does Tubi look over the next three years? Well, Tubi continues to grow.

Speaker Change: And so we continue to look for accretive opportunities.

Speaker Change: That would align with our strategic goals and initiatives.

Speaker Change: And we'll continue to do that we obviously don't want our balance sheet to go to waste but.

Speaker Change: But we havent, we havent found anything yet that we are.

Speaker Change: Emily going to kind of our.

Speaker Change: Do follow so, but but it is something we are we are keeping a close eye on.

Speaker Change: And then on <unk>, what is how does tubular over over the next three years to be continues to grow obviously as you get to scale.

Lachlan Murdoch: Obviously, as you get the scale, you know, the growth trajectory, which is just harder to compare with the growth that we've had over the last couple of years, but Tubi continues to grow. Money will continue to flow from linear entertainment, television, you know, particularly cable entertainment, networks into streaming, streaming, AVOD, and SVOD services with advertising supported SVOD services. That trend will not, will not slow, and Tubi will be one of the main beneficiaries of that money flow.

Speaker Change: The growth trajectory, which is harder to comp with the growth that we've had over the last couple of years, but to be continues to grow.

Speaker Change: Money will continue to flow from linear entertainment.

Speaker Change: TV, particularly.

Speaker Change: Particularly cable.

Speaker Change: Entertainment networks or into <unk>.

Speaker Change: Streaming.

Speaker Change: Dreaming, a bourdon and asphalt.

Speaker Change: Advertising supported asphalt services that that trend will not.

Speaker Change: We will not slow and Toby will be one of the main beneficiaries of that money flow. So so we're confident in the continued growth of <unk> and under the leadership of honestly. It just goes from strength to strength.

Lachlan Murdoch: So, we're confident in the continued growth of Tubi and under the leadership of Anjali, it just goes from, from. Operator, we have time for one more question. Okay, that question comes from the line of Michael Morris from Guggenheim. Please go ahead.

Speaker Change: Operator, we have time for one more question.

Speaker Change: Okay that question comes from the line of Michael Morris from Guggenheim. Please go ahead.

Michael Morris: Thank you. Good morning, guys. I have two questions, if I could.

Michael Morris: Thank you good morning, guys two questions if I could the first one is on the JV.

Speaker Change: <unk>.

Michael Morris: Some of your existing distribution partners have brought up concerns that it's.

Michael Morris: Somewhat unfair to them for you to have a sports only JV.

Michael Morris: It seems that you would disagree by virtue of the fact that you are moving forward. So I'd love if you could address that.

Michael Morris: Those concerns and whether you think there will be changes in the marketplace or whether you think those concerns were unfounded.

Michael Morris: And the second question a bit more on the model.

Michael Morris: Perhaps for Steve TV profit was I think notably strong in the quarter given that on a year over year basis, you did not have the Super Bowl or those extra playoff games. So can you maybe unpack a little bit we would think that those types of events would be.

Michael Morris: Uniquely profitable so to show profit growth as you comp those challenges I'd be curious if you could talk about sort of the sustainability and whether maybe where over estimating how profitable those games are thank you.

Michael Morris: The first one is the JV, and some of your existing distribution partners have brought up concerns that it's in some way unfair to them for you to have a sports-only JV. It seems that you would disagree by virtue of the fact that you're moving forward, so I'd love if you could address those concerns and whether you think there will be changes in the marketplace or whether you think those concerns are unfounded.

Speaker Change: Thanks, Mike ill, let me let me start.

Mike: So on the.

Mike: Sports joint venture and how we certainly view it and how.

Speaker Change: We discuss.

Mike: Discuss it.

Mike: With our distribution partners I think the first thing and this is.

Mike: Incredibly important to us is that we are.

Mike: <unk>.

Michael Morris: Fundamentally supportive of the traditional cable TV bundle. It will continue to be for a very long time, our number one.

Mike: Revenue stream.

Michael Morris: And we are we are all in to support our distributors in every way we can.

Mike: In that.

Mike: In that bundle and supporting their subscribers and their business. So that's that is absolutely a fundamental.

Mike: Fact for us.

Michael Morris: Having said that we've always said, it's important for us to put our brands where.

Mike: We're viewers are right.

Michael Morris: And in the universe of <unk>.

Mike: Sports fans that don't currently take.

Michael Morris: Cable bundle that is the universe that.

Mike: Sports joint venture will be entirely focused on and Thats frankly important to us.

Michael Morris: Because we are so invested in the in the.

Michael Morris: In the cable bundle, that's a sports joint venture will be very targeted and very focused on.

Speaker Change: The non traditional pay TV.

Mike: Viewer.

Michael Morris: Bureau universe, and we think we can.

Michael Morris: Very cleverly in very in a very targeted way market to those subscribers. So that we minimize any cannibalization of the traditional of traditional.

Lachlan Murdoch: Subscribers.

Mike: So.

Michael Morris: So we're very open with our distributors were very open with how important they are to us and also how because of that importance. How we can focus on sports joint venture and the areas that needs to be focused on.

Michael Morris: And the second question, a bit more on the model, perhaps for Steve, television profit was, I think, notably strong in the quarter, given that, on a year-over-year basis, you did not have the Super Bowl or those extra playoff games. So can you maybe unpack a little bit?

Michael Morris: Mark It's Dave just in terms of TV profitability. So.

Michael Morris: Quarter to quarter, we were up.

Michael Morris: Close to $30 million is the way to think about it is the single biggest event with Super Bowl, which was a high tens of million dollars EBITDA contribution last year versus this year.

Lachlan Murdoch: We would think that those types of events would be uniquely profitable. So to show profit growth as you compare those challenges, I'd be curious if you could talk about sort of the sustainability and whether maybe we're overestimating how profitable those games are. Thank you. Thanks, Mike.

Steve: But then you look at it this year to offset that we grew affiliate fee in this segment by about $70 million.

Lachlan Murdoch: One for the other basically is a push to be was it a push quarter on quarter in terms of EBITDA deficit.

Speaker Change: And so then what's left is the biggest EBITDA sort of driver of contribution when you look at it from a quarter on quarter perspective is the change in entertainment programming costs, which was.

Lachlan Murdoch: An ongoing push towards.

Lachlan Murdoch: From scripted towards unscripted to get dollar cost per hour down without.

Lachlan Murdoch: Humming dealership as well as the impact of the strikes and so there's a lot of other puts and takes in there, but they are the sort of the three things that drive it.

Speaker Change: At this point, we are on time, but if you have any further questions. Please give me or Charlie can handle the call. Thanks, so much for joining us today.

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

Speaker Change: We're sorry your conferences ending now please.

Lachlan Murdoch: Yeah.

Lachlan Murdoch: [music].

Lachlan Murdoch: So on the sports joint venture and how we certainly view it and how we discuss it with our distribution partners, I think that the first thing, and is incredibly important to us, is that we are wholly and fundamentally supportive of the traditional cable television bundle. It will continue to be for a very long time our number one revenue stream, and we are all in to supporting our distributors in every way we can in that bundle and supporting their subscribers and their business. So that is absolutely a fundamental fact for us.

Gabrielle Brown: 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. Scab. Your old Brown. Please go ahead Ms Brown.

Lachlan Murdoch: Having said that, we've always said it's important for us to put our brands where viewers are, right? And in the universe of sports fans that don't currently take a cable bundle, that is the universe that the sports joint venture will be entirely focused on. And it's frankly important to us that, because we are so invested in the cable bundle, that the sports joint venture will be very targeted and very focused on the non-traditional pay TV viewer universe.

Lachlan Murdoch: And we think we can very cleverly and in a very targeted way market to those subscribers so that we minimize any cannibalization of traditional subscribers. So we're very open with our distributors, we're very open with how important they are to us, and also, because of that importance, how we can focus a sports joint venture in the areas it needs to be focused. Mark, it's Steve.

Speaker Change: Thank you operator, good morning, and welcome to our fiscal 2024 third 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.

Steve: 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.

Steve: These statements are based on management's current expectation 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.

Steve: 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 our SEC filings, which are available in the Investor Relations section of our website.

Steven Silvester Tomsic: Just in terms of television profitability, so... Quarter to quarter, we were up close to $30 million. The way to think about it is that the single biggest event was the Super Bowl, which was a high tens of millions of dollars in EBITDA contribution last year versus this year. But then you look at it this year, to offset that, we grew affiliate fees in the segment by about $70 million, and so one for the other, basically, is a push.

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

Steven Silvester Tomsic: Tubi was a push quarter-on-quarter in terms of its EBITDA deficit there. And so then what's left is the biggest EBITDA driver of contribution, when you look at it from a quarter-on-quarter perspective, is the change in entertainment programming costs, which was an ongoing push from scripted to unscripted to get the dollar cost per hour down without harming revenue as well as the impact of the strikes, and so there's a lot of other puts and takes in there, but they're sort of the big three At this point, we are out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us.

Steve: Thank you Gabby and thanks, everyone for joining us this morning.

Operator: Ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect. We're sorry, your conference is ending now. Please hang up. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Ladies and gentlemen, thank you for standing by.

Operator: Welcome to the Fox Corporation Third Quarter Fiscal Year 2024 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 functionality for the question and answer queue will be available at that time. If you should require assistance during the call, please press star then zero.

Steven Silvester Tomsic: This quarter Fox continued to distinguish itself from its peers deliver.

Operator: Delivering 7% EBITDA growth and demonstrating again, the strength of our brands and the advantages of our strategy.

Operator: This result is even more impressive when considering we are comping to last year's third quarter, which enjoyed a significant tailwind from Super Bowl 57.

Gabrielle Brown: 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.

Operator: In the fiscal third quarter total affiliate revenue fees grew 4% with positive growth at both our television and cable segments driven by pricing benefits from our recent renewals.

Gabrielle Brown: Headline advertising revenues were down during the quarter as expected due to the absence of the Super Bowl and fewer NFL broadcast than in the prior year.

Gabrielle Brown: If not for the difference in our NFL postseason schedule. Our total advertising revenues would have increased a few percent.

Gabrielle Brown: 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 files. 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 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. Thank you, Gabby, and thanks, everyone, for joining us this morning.

Gabrielle Brown: Overall advertising trends at Fox are clearly moving in the right direction, both in the scatter market and an early upfront discussions.

Lachlan Murdoch: Demand for sports remains robust while trends at Fox news are improving across the board, including the fact that we have now fully lapped. The direct response market issue that had adversely impacted Fox news Dr revenues.

Lachlan Murdoch: And while there wasn't much of a primary season. This year, we do expect strong political advertising for national and local races, as well as local ballot issues in the first half of our fiscal 'twenty, five which had largely benefit our station group.

Lachlan Murdoch: As we look to our annual upfront presentation next week, our focus on live content and must watch events, such as the coming presidential election cycle and next year's Super Bowl combined with two b's position as the most watched free TV and movie streaming service will favor our enviable position with advertisers across the Fox poor.

Lachlan Murdoch: Folio.

Lachlan Murdoch: Operationally Fox News again ended the third quarter as the most watched cable network in total day and Prime time Fox.

Lachlan Murdoch: Fox News also strengthened its leadership position inside the category, gaining share to now again command 50% of total debutants. These gains are underpinned by a dedicated team of journalists and staff who are focused on delivering coverage and insights on current events most relevant to our viewers. Building from our strength in primetime, we are expanding our leadership across dayparts, whether that be mornings with Fox & Friends, afternoons with The Five, or late nights with Gutfeld.

Lachlan Murdoch: <unk> also strengthened its leadership position inside the category gaining share to now again command, 50% of total debut.

Lachlan Murdoch: These gains are underpinned by a dedicated team of journalists and staff, who are focused on delivering coverage and insights on current events most relevant to our viewers.

Lachlan Murdoch: Building from our strengthened in Prime time, we are expanding our leadership across day parts, whether that'd be mornings with Fox and friends afternoons with the five or late nights with gutfeld.

Lachlan Murdoch: And we expect this momentum to continue as we ramp our election coverage heading into the fall.

Lachlan Murdoch: <unk> ended the third quarter with 22% revenue growth driven by a 36% increase in total view time and 20% growth in monthly active users to just under $80 million.

Lachlan Murdoch: Our expansive content library, and our differentiated user base have solidified <unk> position as the most watched free TV and movie streaming service in the U S. With one 6% of total TV viewing ahead of Peacock Max the Roku channel, Paramount, plus and Pluto TV and only <unk>.

Lachlan Murdoch: Marginally behind Disney plus.

Lachlan Murdoch: From its debut on the Nielsen gauge in February of 23 to the most recent gauge in March of 24, Tubi's share of total U.S. TV view time grew 60 percent, which is faster than any other streaming service over that same period of time. Apart from just its growing scale, Tubi is also unique and uniquely valuable to advertisers through its reach and through its engagement. Over 60% of Tuba users are classified as cord cutters, or Cordenever, and 90% of those users' time-watching is proactively on-demand as opposed to passively watching a fast-track. This positions Tuba very well as an important part of the growing digital streaming advertising market.

Lachlan Murdoch: From its debut on the Nielsen gauge in February of 23 to the most recent gauge in March of 'twenty for <unk> share of total U S. TV view time grew 60%, which is faster than any other streaming service over that same period of time.

Lachlan Murdoch: Apart from just its growing scale to be is also unique and uniquely valuable to advertisers through which to reach and through its engagement.

Lachlan Murdoch: Over 60% of <unk> users are classified as cord cutters.

Lachlan Murdoch: Or cord Nevers and 90% of those users time watching is proactive proactively on demand as opposed to passively watching a fast channel.

Lachlan Murdoch: Dispositions to be very well as an important part of the growing digital streaming advertising marketplace.

Lachlan Murdoch: We are looking forward to showcasing Toobie's strengths at next week's Up... Fox Sports had an impressive quarter with strengths across all areas of our portfolio. We finished the 30th anniversary of the NFL on Fox on a high note, with three NFC playoff games on Fox averaging an incredible 45 million viewers. This was capped with the NFC championship game drawing over 56 million viewers, which is 19 percent higher than last year's game and the most watched in over a decade.

Lachlan Murdoch: We are looking forward to showcasing to be strengths at next week's upfront.

Lachlan Murdoch: Fox Sports had an impressive quarter with strength across all areas of our portfolio.

Lachlan Murdoch: We finished the 30 <unk> anniversary of the NFL on Fox on a high note with three NFC playoff games on Fox, averaging an incredible 45 million viewers.

Lachlan Murdoch: This was capped with the NFC championship game, drawing over 56 million viewers, which is 19% higher than last year's NFC Championship game and the most watched in over a decade.

Lachlan Murdoch: This season also reinforced Fox solid position in college sports with strong viewership in both college football and college basketball.

Lachlan Murdoch: In fact in the current academic year boxes are the most watched college football men's college basketball and women's College basketball games across the regular season.

Lachlan Murdoch: College sports has grown to become the second biggest source of Fox viewership behind only the NFL.

Lachlan Murdoch: Total consumption of college sports and Fox has grown by over 40% through the last five years.

Lachlan Murdoch: And in the March quarter, we launched the U F L. United Football League. The result of the merger of the Usfl and XFL.

Lachlan Murdoch: With this merger, the outlook for spring football is promising, and we are pleased with the results through the midpoint of the season. While the sports calendar in our upcoming fiscal fourth quarter tends to be quieter, Fox Sports is excited to present its Summer of Soccer, featuring over 200 hours of live soccer coverage across our platform, starting with the UEFA European Football Championship on June 14th and Copa America on June 20th. This summer will also feature a new schedule from Fox Entertainment, with returning favorites like Gordon Ramsay's Food Stars and exciting new shows like the 1% Club.

Lachlan Murdoch: With this merger the outlook for spring football is promising and we are pleased with our results through the midpoint of the season.

Lachlan Murdoch: While the sports calendar in our upcoming fiscal fourth quarter tends to be quieter Fox sports is excited to present its summer soccer featuring over 200 hours of live soccer coverage across our platform starting with the UEFA European Football Championship on June 14th and Copa America on June 20th.

Lachlan Murdoch: This summer will also feature a new scheduled from Fox Entertainment with returning favorites like Gordon Ramseys Foods stars and exciting new shows like the 1% club.

Lachlan Murdoch: This follows a successful spring slight that featured two of the top five new primetime series and crap populous and the floor with craft populous ranking as the number one new Primetime Entertainment show and the floor as the number one game show season today.

Lachlan Murdoch: Last quarter, we announced the formation of a new sports focused digital distribution platform with our partners Disney and Warner Brothers Discovery.

Lachlan Murdoch: We are happy to have hired a truly world class CEO and Pete just add and he is off to a flying start.

Lachlan Murdoch: And just several weeks the JV now has over 150 engineers and executives dedicated to building a unique innovative product, which focuses on sports fans outside of the traditional TV bundle.

Lachlan Murdoch: We've already launched an internal beta service, which I have been Trialing. This past week and I have to say, it's an incredibly exciting product and we can't wait to launch this fall.

Lachlan Murdoch: And I have to say, it's an incredibly exciting product, and we can't wait to launch it this fall. Today's media market is certainly dynamic, but the strength and leadership of our brands and their capacity to monetize those strengths financially underscore our considered strategy, underpinned by our best-in-class balance sheet. We ended the quarter with $3.8 billion in cash and just one times net leverage. We remain committed to driving long-term shareholder value creation through the thoughtful balance of managing our existing businesses, pursuing new adjacencies, and returning capital to our shareholders. And with that, I'll hand it over to you. Thanks, Lachlan, and good morning, everyone.

Lachlan Murdoch: Today's media market is certainly dynamic, but the strength and leadership of our brands and their capacity to convert those strengths financially underscores our considered strategy.

Lachlan Murdoch: Underpinning by our best in class balance sheet, we ended the quarter with $3 8 billion in cash and just one times net leverage.

Lachlan Murdoch: We remain committed to driving long term shareholder value creation through the thoughtful balance of managing our existing businesses pursuing new adjacencies and returning capital to our shareholders.

Lachlan Murdoch: And with that I'll hand, it over to Steve.

Lachlan Murdoch: Thanks, a lot Glenn and good morning, everyone.

Steven Silvester Tomsic: Fox's strategy continues to deliver solid results. Even with the comparison to our blockbuster NFL schedule of the prior year, we posted total revenues of $3.45 billion and grew adjusted EBITDA by 7% to $891 million. Total company affiliate fee revenues grew 4% over the prior year, with growth at both our television and cable segments, supported by a recent cycle of affiliate renewal. Reflecting the event-driven nature of our business, advertising revenues on a headline basis were down $34 per share, as we compared against last year's broadcast of the Super Bowl, along with two less NFL playoff broadcasts in the current year quarter.

Speaker Change: <unk> strategy continues to deliver solid results.

Lachlan Murdoch: Even with the comparison to a blockbuster NFL schedule as the prior year, we posted total revenues of $3 five $3 45 billion.

Steven Silvester Tomsic: And grew adjusted EBITDA by 7% to $891 million.

Steven Silvester Tomsic: Total company affiliate fee revenues grew 4% over the prior year with growth with growth at both our television and cable segments supported by our recent cycle of affiliate renewals.

Steven Silvester Tomsic: As Lachlan just mentioned, if not for the impact of these NFL schedule items, total company advertising revenues would have grown low single digits. Total company other revenues were down 22% versus the prior year, primarily the result of the timing of sports sub-licensing revenues, which were more weighted towards our fiscal second quarter this year. Total company expenses fell 21% year-over-year, primarily as a result of the NFL postseason schedule differences I just mentioned. Net income attributable to stockholders of $666 million, or $1.40 per share, compares to a net loss of $54 million, or negative 10 cents per share, reported in the prior year period.

Steven Silvester Tomsic: As Lachlan just mentioned if not for the impact of these NFL schedule items total company advertising revenues would have grown low single digits.

Steven Silvester Tomsic: Total company other revenues were down 22% versus the prior year, primarily the result of the timing of sports of licensing revenues, which were more weighted towards our fiscal second quarter. This year.

Steven Silvester Tomsic: Total company expenses fell 2021% year over year, primarily primarily a result of the NFL post season scheduled differences I just mentioned.

Steven Silvester Tomsic: Net income attributable to stockholders of $666 million.

Steven Silvester Tomsic: We're a $1 40 per share compares to the net loss of $54 million or negative <unk> 10 per share reported in the prior year period.

Steven Silvester Tomsic: This year-over-year variance reflects the growth in EBITDA, as well as the absence of last year's Fox News media litigation chart and a current quarter book gain on the merger transaction of the USFL, which has now been deconsolidated in connection with the formation of the United Football League. Excluding these and other non-core items, adjusted EPS was $1.09, up 16% against last year's $94.

Steven Silvester Tomsic: This year over year variance reflects the growth in EBITDA as well as the absence of last year's Fox News media litigation charge in the current quarter gain on the merger transaction and the Usfl, which has now been deconsolidation in connection with the formation of the United Football League.

Steven Silvester Tomsic: Excluding these and other noncore items adjusted EPS was $1 nine up 16% against last year's <unk> 94 things.

Steven Silvester Tomsic: Now let's turn to our segment. At Cable, revenues were $1.47 billion, down 6% from the prior year quarter, while EBITDA grew 3%. Cable affiliate fee revenues were up 1%, with growth in pricing from our distribution renewals outpacing the impact from industry subscriber declines running in the mid-8% range. Cable advertising revenues fell by 6%, or $20 million. At the national sports networks, advertising revenues were down due to the absence of last year's Super Bowl-related programming and the World Baseball Classic.

Speaker Change: Now, let's turn to our segment results.

Steven Silvester Tomsic: At cable revenues were $1 $47 billion.

Steven Silvester Tomsic: Down 6% from the prior year quarter, while EBITDA grew 3% CAGR.

Steven Silvester Tomsic: Cable affiliate fee revenues were up 1% with growth in pricing from our distribution renewals outpacing the impact of from industry subscriber declines running in the mid 8% range.

Steven Silvester Tomsic: Yes.

Steven Silvester Tomsic: Cable advertising revenues fell by 6% or $20 million.

Steven Silvester Tomsic: At the National Sports networks advertising revenues were down due to the absence of last year's Super Bowl related programming and the World Baseball Classic at Fox News AD revenues were impacted by moderating direct response pricing declines and lower digital traffic, partially offset by higher national pricing.

Steven Silvester Tomsic: Cable other revenues decreased $89 million.

Steven Silvester Tomsic: Primarily a result of the timing of sports sub licensing revenues, which were more weighted towards our fiscal second quarter.

Steven Silvester Tomsic: Cable expenses were 16% lower than the prior year, primarily due to the timing of the Associated Sports sub-licensing expenses, lower costs at Fox News, and the deconsolidation of the USFL. All in, and despite segment revenues being down 6%, quarterly adjusted EBITDA at Cable grew 3% over the prior year quarter to reach $819 million. Turning to our television segment, revenues were $1.94 billion, down 22% from the prior year, while EBITDA increased 24%.

Steven Silvester Tomsic: Cable expenses was 16% lower than the prior year, primarily due to the timing of the associated sports sub licensing expenses lower costs at Fox News and the deconsolidation of the USF al.

Steven Silvester Tomsic: All in and despite segment revenues being down 6% quarterly adjusted EBITDA at cable grew 3% over the prior year quarter to reach $819 million.

Steven Silvester Tomsic: Turning to our television segment, where revenues were $1 $94 billion down.

Steven Silvester Tomsic: Down 22% from the prior year, while EBITDA increased 24%.

Steven Silvester Tomsic: TV affiliate fee revenues grew 9% over the prior year, but price increases across our owned and operated, as well as third-party Fox-affiliated stations, more than offset the impact from subscribers. As mentioned previously, TV advertising revenues were impacted this quarter by the composition of our postseason NFL schedule, namely the absence of last year's Super Bowl and two less NFL playoff games. As a result, on a headline basis, TV advertising revenues were down 40%

Steven Silvester Tomsic: Television affiliate fee revenues grew 9% over the prior year as price increases across our owned and operated as well as third party folks affiliated stations more than offset the impact from subscriber declines.

Steven Silvester Tomsic: As mentioned previously television advertising revenues were impacted this quarter by the composition of that post season, NFL schedule, namely the absence of last year's Super Bowl and two less NFL playoff games as a result on a headline basis TV advertising revenues were down 40%.

Steven Silvester Tomsic: TV Other revenues increased $13 million, primarily the result of the timing of deliveries from our entertainment production company. However, total TV revenues were down versus the prior year. This was more than offset by a 24 percent decrease in TV, expenses were lower in the quarter, primarily due to the impact of the NFL schedule, along with fewer hours of original scripted primetime content, including the impact of the industry labor demand.

Steven Silvester Tomsic: TD other revenues increased $38 million, primarily the result of the timing of deliveries from our entertainment production companies.

Steven Silvester Tomsic: While total television revenues were down versus the prior year. This was more than offset by 24% decrease in TV expenses.

Steven Silvester Tomsic: Fences were lower in the quarter, primarily due to the impact of the NFL schedule, along with fewer hours of original scripted prime time content, including the impact of the industry labor disputes.

Steven Silvester Tomsic: All in, we delivered quarterly adjusted EBITDA at the TV segment of $145 million, up 24% over the prior year quarter. Turning to cash flow, where we generated strong free cash flow of $1.39 billion in the quarter, reflecting our normal seasonal cycle of collecting advertising revenues from our fall programming, coupled with our major sports rights payments being concentrated in the first half of our fiscal year. From a capital return perspective, from the commencement of the third quarter through today, we have repurchased $300 million under our share buyback program, along with returning nearly $125 million to our shareholders via our semi-annual dividend payment.

Steven Silvester Tomsic: All in we delivered quarterly adjusted EBITDA at the TV segment of $145 million up 24% over the prior year quarter.

Steven Silvester Tomsic: Turning to cash flow, where we generated strong free cash flow of $1 three $9 billion in the quarter, reflecting our normal seasonal cycle of collecting advertising revenues from a full programming coupled with a major sports rights payments being concentrated in the first half of the fiscal year.

Steven Silvester Tomsic: From a capital return perspective from the commencement of the third quarter through today, we have repurchased $300 million under our share buyback program, along with returning nearly $125 million to our shareholders via our semiannual dividend payment.

Steven Silvester Tomsic: Our total cumulative buyback activity since the launch of the program in 2019 now amounts to $5.4 billion, or 26% of our total shares outstanding, and we remain committed to fully utilizing our current $7 billion authorisation. These capital return measures are supported by our robust balance sheet, where we ended the quarter with $3.8 billion in cash.

Steven Silvester Tomsic: A total cumulative buyback activity since the launch of the program in 2019 now amounts to five 4 billion.

Steven Silvester Tomsic: Or 26% of our total shares outstanding and we remain committed to fully utilizing our current 7 billion dollar authorization.

Steven Silvester Tomsic: These capital return measures are supported by a robust balance sheet, where we ended the quarter with $3 8 billion in cash and $7 2 billion in gross debt and with that I'll turn the call back over to Gabby to open the Q&A great. Thanks, Steve.

Steven Silvester Tomsic: $7.2 billion in gross debt. And with that, I'll turn the call back over to Gabby to open the Q&A. Great, thanks Steve. And now we'll be happy to take questions from the investment community. Ladies and gentlemen, I'd like to emphasize the functionality of the question and answer queue. If you wish to ask a question, please press 1 and 0 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by once again pressing 1 and 0.

Gabby: And now we'll be happy to take questions from the investment community.

Gabby: 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 U may Russo remove yourself from queue at any time by once again pressing one then zero if youre using a speakerphone please pick up the handset before.

John Hodulik: The numbers. It has been requested that you limit yourself to one question. Once again, if you have a question. Please press <unk> zero at this time and one moment. Please for your first question.

Operator: Your first question comes from the line of John Hodulik from UBS. Please go ahead.

John Hodulik: Great. Thank you and good morning, everyone.

John Hodulik: Strong growth again at Tubi. I guess a couple questions on that. First, what's driving the growth in TVT? Any color you guys can provide on CPMs?

John Hodulik: Strong growth again at <unk> I guess couple of questions on that I mean, first what's driving the growth and TVT Annie.

John Hodulik: Any color you guys can provide on CPM Disney yesterday gave you a little color on some weakness in connected TV CPM and then three any color you can provide on dilution at <unk> and maybe how you guys view future profitability of that business.

John Hodulik: Disney yesterday gave a little color on some weakness in connected TV CPMs. And then three, any color you can provide on dilution at Tubi and maybe how you guys view future profitability of that business. Thanks very much, John. So, I'll start. I'm not quite sure I understand what you mean by dilution at Tubi, but let me start with the other two.

Speaker Change: Thanks, very much John.

Speaker Change: So let me I'll start.

Speaker Change: Question one.

Lachlan Murdoch: The growth at Tubi continues to be incredibly strong. I think TBT growth comes from both new subscribers and new viewers finding the platform. As you know, we've very efficiently been marketing the platform to bring more people to it, and it's becoming a wider and wider known and loved brand in the marketplace. And the reason for that is, you know, we talked about it on calls before, you know, with 250,000 movies and television series on the platform and now over 250, in fact, I think around 270 live fast channels on the platform. It really does offer a tremendous product for everyone who's utilizing it.

John Hodulik: Understood what you mean by dilution of <unk>, but let me let me start with the other two.

John Hodulik: The growth.

Lachlan Murdoch: The growth to be continues to.

Lachlan Murdoch: To be incredibly strong.

Lachlan Murdoch: I think TVT growth comes from both new subscribers.

Lachlan Murdoch: New viewers are finding the platform.

Lachlan Murdoch: As you'd be aware.

Lachlan Murdoch: <unk>.

Speaker Change: Very good.

Lachlan Murdoch: Efficiently BNP marketing the platform and to bring more people to it and it's becoming.

Lachlan Murdoch: Wider and wider known and loved brand in the marketplace.

Lachlan Murdoch: And the reason for that is we have we've talked about on calls before with 250000.

Lachlan Murdoch: Movies and television.

Lachlan Murdoch: Series on the platform and now over 250 in fact, I think around 270, a live fast channels on the platform. It really does offer a tremendous sum product.

Lachlan Murdoch: For everyone who's who's utilizing it but it's very interesting because.

Lachlan Murdoch: But it's very interesting because, of all those fast channels and all those 250,000 movies and TV series, 90% of the viewing comes on demand. And this is very important because when that viewing comes on demand, and it's proactively on demand as opposed to passively sort of sitting back and watching a fast channel, that's much more valuable to advertisers. And it's certainly something that we're going to make a big deal about at our up-front presentations next week. So because of that, we are very confident we can hold our CPMs to it. We're already very efficient with our CPMs.

Lachlan Murdoch: Although all of those fast channels on all those those 203000 movies and.

Lachlan Murdoch: And <unk>.

Lachlan Murdoch: <unk>, 90% of the viewing comes on demand and this is very important because when the viewing comes on demand and its proactively on demand as opposed to passively sort of sitting back and watching a fast channel that's much more valuable to advertisers and is certainly something that we're going to make a big deal about at our upfront presentations.

Lachlan Murdoch: Next week.

Lachlan Murdoch: So because of that we are very confident we can hold our cpm's <unk>, we're already very efficient with our Cps.

Lachlan Murdoch: Some of our competitors priced themselves when they entered the <unk> market over the past 12, and 18 months are very high.

Lachlan Murdoch: And we're seeing in the marketplace them, having a drop cpm's as new entrants.

Lachlan Murdoch: Add supply to the market so that's affecting the market overall.

Lachlan Murdoch: It certainly has an impact on the market.

Lachlan Murdoch: For advertising for <unk>.

Lachlan Murdoch: But from a CPM point of view, it's not really going to be a big impact to us I should just say, though that next quarter, we are going to be.

Lachlan Murdoch: Facing difficult comps in the fourth quarter I think if you remember this time last year <unk> was up 47%.

Lachlan Murdoch: I think if you remember this time last year, Tubi was up 47% in revenue, and that's going to be a very difficult comp for us next quarter. So there will be some headwinds for the whole marketplace, but from a comp point of view for Tubi as well, in the next quarter. So that's just a slight word of caution. Your next question comes from the line of Robert Fishman from Moffitt. Please go ahead. Hi, good morning, everyone.

Robert S. Fishman: In revenue and that can be a very difficult comp.

Robert S. Fishman: For us next quarter so.

Robert S. Fishman: There will be.

Lachlan Murdoch: <unk>.

Robert S. Fishman: Some headwinds.

Robert S. Fishman: But for the whole market by spot, but from a comp point of view for <unk> as well and in the next quarter. So that's just a.

Lachlan Murdoch: Sure.

Robert S. Fishman: <unk> a word of caution.

Lachlan Murdoch: Your next question comes from the line of Robert Fishman from Moffett. Please go ahead.

Robert S. Fishman: Hi, good morning, everyone.

Robert S. Fishman: Given all the press about the NBA negotiations underway I'm just curious if you can think of.

Robert S. Fishman: <unk>.

Robert S. Fishman: As far as your broader sports rates go and how do you think about the value of the Fox broadcast network as you negotiate those future sports right and then the flip side of that is do you feel like youre at a competitive disadvantage without your own outside service to compete for future right.

Robert S. Fishman: And then if I can just separately.

Robert S. Fishman: Given all of the M&A discussion in the industry. What are your latest thoughts on monetizing some of your strategic non core assets like your fan to option and studio a lot. Thank you.

Lachlan Murdoch: Thanks, Roger. So with the NBA, I can't comment on other people's negotiations and where that may or may not end up, but in terms of how we think about it affecting the value of the Fox network and our sports portfolio, we're very happy with our sports portfolio. [inaudible] strong with the current portfolio that we have, which is one of the reasons why we didn't pursue the NBA in this round of negotiations. But I think it does go to the value of broadcast television, because sports leagues still need reach that is still incredibly important for them, for them to drive their fan bases, for them to get the maximum amount of viewership for their games and matches.

Speaker Change: Thanks, Roger So so with the <unk> I would say I can't sort of comment on other people's negotiations and where that may or may end up in terms of how we think about it affecting the value of the Fox network and our sports portfolio, we're very happy.

Lachlan Murdoch: With our support sports portfolio, we obviously look at them.

Lachlan Murdoch: Rights packages as they come up but on but we see them as a <unk>.

Lachlan Murdoch: As a as a portfolio or a bouquet of sports rights that we have and we feel very.

Lachlan Murdoch: <unk>.

Lachlan Murdoch: Strong.

Lachlan Murdoch: Our current portfolio portfolio that we have which is one of the reasons why.

Lachlan Murdoch: We didn't pursue the <unk>.

Lachlan Murdoch: And this.

Lachlan Murdoch: In this round of negotiations, but I think it does go to the value of broadcast television.

Lachlan Murdoch: Because sports leagues still need reach reaches that is still incredibly important for them for them to drive their fan bases for them.

Lachlan Murdoch: The maximum amount of viewership to their their games and matches and so the value of the Fox network and frankly are strategically kind of positioned our station group.

Lachlan Murdoch: And so the value of the Fox network and, frankly, our strategically kind of positioned station group to any sports league only increases over time is what we're seeing. And therefore, I don't think, coming to the second part of your question, you know, I don't think we are strategically disadvantaged with not having a subscription video on demand service because we have found in the past that we can partner with others. Well, frankly, the leagues tend to partner with others. We can take the rights where we can broadcast to the most number of Americans, you know, possible. And they can allocate rights to SVODs as needed.

Lachlan Murdoch: Two.

Lachlan Murdoch: Any sports League.

Lachlan Murdoch: Only increases over time is what we're seeing.

Lachlan Murdoch: And therefore, I don't think coming off the <unk>.

Lachlan Murdoch: Second part of your question I don't think we are strategically disadvantaged with not having a subscription video on demand service because we found in the past, we can partner with others, well frankly, the leagues tend to partner with others.

Lachlan Murdoch: We can take.

Lachlan Murdoch: The rights, where we can we can broadcast of the most amount of Americans possible.

Lachlan Murdoch: And they.

Lachlan Murdoch: They can they can allocate.

Lachlan Murdoch: <unk> rights to <unk> to ask bogs as needed, but they're never going to be able to live entirely without a broadcast network and broadcast distribution.

Lachlan Murdoch: Yeah, so Robert, just in terms of the M&A picture, like our posture on sort of what you term non-core assets, we're strong believers in the sports betting market in this country. We read with interest your note that put a billion-dollar value on it, and so now our intention is to see that through and eventually exercise it. And then the studio lot, we think, is a long-term asset for us. We have development plans for that, and so we don't have any change in posture around early monetisation of those assets.

Lachlan Murdoch: M&A.

Speaker Change: So Robert just in terms of the M&A picture lab posture.

Lachlan Murdoch: So it is what you.

Lachlan Murdoch: E term noncore assets like <unk> with strong believers in the sports betting market.

Lachlan Murdoch: In this country.

Lachlan Murdoch: Read with interest you will note that put a billion dollar value on it.

Lachlan Murdoch: Now our intention is to say that through and eventually exercise.

Lachlan Murdoch: And then the studio look we think is a long term asset for US we have development plans for that and so we don't have any change in posture around early monetization of those assets. We think they are incredibly valuable for the long term.

Lachlan Murdoch: We think they're incredibly valuable. And I just remind you, it's not only the value of the option but also the equity that we have in Flutter, which is today worth over $900 million. Next question, please, operator. Your next question comes from the line of Ben Swinburne from Morgan Stanley. Please go ahead. Thanks. Good morning.

Lachlan Murdoch: I'll just remind you it's not only the value of the of the option, but also the equity that we have and flatter which is today worth over $900 million right now.

Benjamin Daniel Swinburne: Next question please operator.

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

Benjamin Daniel Swinburne: Thanks, Good morning.

Benjamin Daniel Swinburne: Lots on a just a sort of a question around kind of your products coming to market. The streaming JV and also maybe how <unk> might fit in.

Benjamin Daniel Swinburne: Any more you can share with us on sort of what your what do you think is really differentiated about the product we haven't seen it yet you have.

Benjamin Daniel Swinburne: And I noticed on the Disney deck yesterday that it says that a definitive agreement hasn't been signed yet. I didn't know if there was something, you know, holding it up or if that meant anything or any update on sort of the go forward plan. And then, you know, I'm wondering if Tubi, with its reach as an app-based service, is that an opportunity for maybe bundling the JV product or merchandising it in some way?

Benjamin Daniel Swinburne: And I noticed in the Disney deck yesterday that it says that.

Benjamin Daniel Swinburne: Tenet of agreement has been signed yet so I didn't know.

Benjamin Daniel Swinburne: If there were something holding it up or if that meant anything or any update on sort of the go forward plan.

Benjamin Daniel Swinburne: And then I'm wondering Toby with its reach as an App based service is that an opportunity for maybe bundling the JV product or merchandising and in some way you have a pretty interesting direct customer relationship with <unk> I know, it's a different kind of product offering, but I was curious if you've thought about.

Benjamin Daniel Swinburne: You have a pretty interesting direct customer relationship with Tubi. I know it's a different kind of product offering, but I was curious if you'd thought about, you know, leveraging that asset or those two assets together to create more value for the company. Thanks a lot.

Benjamin Daniel Swinburne: Leveraging that asset or those two assets together to create more value for the company. Thanks a lot.

Lachlan Murdoch: Thanks very much, Ben. So, first of all, as I said, I've got, in the room behind me, the beta version of the streaming app, and I don't think we've announced the name yet, so I won't inadvertently do it on this call, I hope, not yet anyway.

Speaker Change: Thanks, very much Ben So first of all as I said I've got actually.

Lachlan Murdoch: In the room behind me I've got that.

Lachlan Murdoch: The beta version.

Lachlan Murdoch: Of the <unk>.

Lachlan Murdoch: Dreaming App and I don't think we've announced the name yet so I won't do it on this call I hope I'm, not yet anyway and.

Lachlan Murdoch: But look, it's something that we've been able to engage with, and it is really looking tremendously exciting, as I said in my comments. It's a, it's very innovative, it's, designed to be entirely focused on the core cutters, people who are not in the cable bundle, and who frankly won't be able to compare it to a tier of live channels. It's a very different digital first product, which when you eventually get it and get to enjoy it, you'll understand how powerful it is, groundbreaking uh... certainly in this country uh... it really is in terms of the speed uh... you know we we everyone is uh... is uh... you know uh... running at that sort of full pace uh... to get the product uh... uh... finished and um... uh... and and delivered obviously there's the the uh...

Lachlan Murdoch: But it doesn't look it's something that we've been able to.

Lachlan Murdoch: <unk> engaged with and it is really looking.

Lachlan Murdoch: Tremendously exciting as I said in my comments.

Lachlan Murdoch: It's a it's very.

Lachlan Murdoch: Very innovative.

Lachlan Murdoch: It's.

Lachlan Murdoch: Designed to be.

Lachlan Murdoch: Entirely focused on the.

Lachlan Murdoch: Cord Nevers cord cutters people, who are not in the in the in the cable bundle and you frankly can't won't be able to compare it to.

Lachlan Murdoch: A.

Lachlan Murdoch: Tier of live channels, it's a very different digital first product.

Lachlan Murdoch: Which when you eventually get.

Speaker Change: Got it and get to get to get to enjoy it.

Lachlan Murdoch: Understand.

Lachlan Murdoch: <unk>.

Lachlan Murdoch: Yeah.

Lachlan Murdoch: Groundbreaking certainly in this country.

Lachlan Murdoch: Really is.

Lachlan Murdoch: In terms of the speed.

Lachlan Murdoch: Everyone is.

Lachlan Murdoch: Running at a sort of full pace to get the product.

Lachlan Murdoch: Finished and.

Lachlan Murdoch: And delivered obviously there is the.

Lachlan Murdoch: Yes.

Lachlan Murdoch: The fun side of it, which is the user interface and how you use it, which has been great to use, but there's a ton of work, obviously, in engineering behind that, in ingesting content from multiple partners and being able to combine that into one sort of seamless platform.

Lachlan Murdoch: The fund side of it which is like the user interface and how you use it which has been great to us, but there's a ton of work, obviously and engineering behind that ingesting.

Lachlan Murdoch: Our content from multiple multiple partners.

Lachlan Murdoch: And being able to combine that into into into one seamless platform. So theres a tremendous amount of work that's being done.

Lachlan Murdoch: So there's a tremendous amount of work that's being done to get us over the line this autumn, but we're incredibly excited. And so there's no – I wouldn't read anything into the final deal terms being signed. It's just a matter of everyone running on all cylinders to get this done. Oh, and Tubi, sorry, the Tubi is a very different product; we don't see an opportunity at this stage, or we haven't contemplated an opportunity at this stage to bundle the sports service with Tubi.

Lachlan Murdoch: To get them.

Lachlan Murdoch: Get us over the line that this autumn, but we're incredibly excited and so theres no I wouldn't read anything into them.

Lachlan Murdoch: Final.

Lachlan Murdoch: Deal terms being them being signed.

Lachlan Murdoch: Everyone running on all cylinders to get the finished.

Lachlan Murdoch: Our <unk> sorry in the <unk>, we don't see tubular very different product, we don't see.

Lachlan Murdoch: <unk>.

Lachlan Murdoch: An opportunity at this stage, we haven't contemplated opportunity at this stage to bundle the.

Lachlan Murdoch: The sports service with <unk>.

Lachlan Murdoch: I think it potentially makes more sense to bundle sports with other SVOD services, which you'll likely see as we go forward. Next question, please. Your next question comes from the line of Jessica Ehrlich from Bank of America. Please go ahead.

Lachlan Murdoch: I think it makes potentially more sense to bundle sports with other <unk> services.

Lachlan Murdoch: Which you'll likely see as we go forward.

Jessica Reif Cohen: Next question please.

Jessica Reif Cohen: Thank you. I have a couple of questions. First, on political advertising, Lachlan, you seem pretty confident that it will come back, but I guess the question is really, will it come back linear the way it has in the past, and what's your overall outlook? Second, on M&A, you may have the strongest balance sheet in the industry, so I was just wondering. And then finally, just a follow-up on 2B, which is such incredible momentum. You've really pulled away from all the past. What does it look like over the next three years? Great. Thanks, Jessica.

Lachlan Murdoch: Your next question comes from the line of Jessica Ehrlich from Bank of America. Please go ahead.

Jessica: Thank you a couple of questions first on political advertising.

Jessica: And you seem pretty confident that it will come back but.

Jessica Reif Cohen: I guess the question as it relates to build to come back to linear or the way. It has in the past and what's your overall outlook.

Speaker Change: Second on M&A.

Jessica Reif Cohen: You may have the strongest balance sheet in the industry. So I was just wondering if you could explore.

Speaker Change: What opportunities you see out there.

Jessica Reif Cohen: Seems to be a lot of things going on in the industry and then finally, just a follow up on <unk>, which has.

Jessica Reif Cohen: Such incredible momentum, you've really pulled away from certainly all the other sales channels and competing with the big asphalt company and channels.

Jessica Reif Cohen: That forms.

Jessica Reif Cohen: Does it look like over the next three years or so.

Lachlan Murdoch: So, let me start with politics. You know, we are confident. We obviously were disappointed for multiple reasons that there wasn't a more competitive primary season.

Jessica: Great. Thanks, Jessica.

Speaker Change: On let me start with them.

Lachlan Murdoch: Political.

Lachlan Murdoch: We are confident we can obviously we're disappointed.

Jessica: Multiple reasons that there wasn't a moron.

Lachlan Murdoch: Competitive.

Lachlan Murdoch: Mary season.

Lachlan Murdoch: But we certainly know this is an election in which both sides of politics, or all sides of politics are very focused on, have raised a tremendous amount of money. And that money will flow, ultimately, to local television. I am extremely confident of that. One of the reasons we're confident, in addition to the amount of money that we know has been raised, is the position of our stations, specific stations within the group, and how that aligns with the political map.

Lachlan Murdoch: But.

Lachlan Murdoch: We certainly know this is an.

Speaker Change: On election, which.

Lachlan Murdoch: Both sides of politics are all sides of politics are very focused on.

Lachlan Murdoch: Raised a tremendous amount of money and that money.

Lachlan Murdoch: Will will flow ultimately to them to local local television.

Speaker Change: And we are.

Lachlan Murdoch: Extremely confident of that.

Lachlan Murdoch: One of the reasons. We're confident in addition to the amount of money that we know has been raised or are just the position of our of our station specific stations within the group and how that aligns with the political.

Lachlan Murdoch: If you look at the tight, so putting aside the presidential election, everyone focuses on a call to talk about national trends, and people focus on the presidential election, but you have to look below the presidential election and look at sort of Senate races.

Lachlan Murdoch: If you look at the tight so putting aside presidential election, I want to focus for focuses on Athena.

Lachlan Murdoch: Call to talk about sort of national trends and people focus on presidential but you have to look below presidential.

Lachlan Murdoch: And look at sort of Senate races. So we have tight Senate Senate races.

Lachlan Murdoch: So we have tight Senate races in key markets where we have big stations. And you have to remember, Jessica, these are big news stations, right? And political money tends to run alongside news, local news. And so there are tight races in Arizona, in Michigan, these are for the Senate in Michigan, tight races in Pennsylvania, and in Wisconsin.

Lachlan Murdoch: In key markets, where we have a big stations and you have to remember Jessica These are big news stations, right and political money tends to run.

Lachlan Murdoch: Ron.

Lachlan Murdoch: Alongside news on local news and so theres tight races in Arizona in Michigan. These are for Senate in Michigan tight races Senate race in Pennsylvania and in Wisconsin.

Lachlan Murdoch: And also of course, our D C station.

Lachlan Murdoch: And also, of course, our DC station will benefit from a tight race in Maryland. And in addition, you've got a lot of issues on the ballot in different markets. So Arizona, Florida, I think Maryland, again, all have a lot of issue money flowing into those on the ballot.

Lachlan Murdoch: Benefit from tight race in Maryland.

Lachlan Murdoch: And Additionally, you've got a lot of issues on the ballot in different markets, So Arizona, Florida.

Lachlan Murdoch: Maryland again, all have a lot of issue money flowing into those.

Lachlan Murdoch: Into those onto onto the ballot. So we think it's going to be an incredibly strong.

Lachlan Murdoch: So we think it's going to be an incredibly strong political season, um... So you'll start to see the benefit of that in the first half of our next fiscal, fiscal 25 for us. The next question on M&A and the balance sheet. I agree wholeheartedly. I think we have the best balance sheet in the industry. We continue to look for creative opportunities that would align with our strategic goals and initiatives, and we'll continue to do that. We obviously don't want our balance sheet to go to waste, but we haven't found anything yet that we're going to do or follow.

Lachlan Murdoch: Political season.

Lachlan Murdoch: It's just starting later than we had we had first expected than you traditionally have when you have a.

Lachlan Murdoch: Our primary.

Lachlan Murdoch: More more contested primaries.

Lachlan Murdoch: <unk>.

Lachlan Murdoch: So youll start to see the benefit of that in the first half of our next fiscal fiscal 'twenty five.

Lachlan Murdoch: For us.

Lachlan Murdoch: The next question on M&A and the balance sheet I agree wholeheartedly I think we have the best balance sheet.

Lachlan Murdoch: In the industry. So I think thats the math just that's just a fact.

Lachlan Murdoch: And so.

Lachlan Murdoch: We continue to look for accretive opportunities.

Lachlan Murdoch: Yes that would align with our strategic goals and initiatives.

Lachlan Murdoch: And we'll continue to do that we obviously don't want our balance sheet to go to waste but.

Lachlan Murdoch: But we havent, we havent found anything yet that we are.

Lachlan Murdoch: Emily going to kind of our.

Lachlan Murdoch: Do follow so, but but it is something we are we are keeping a close eye on.

Lachlan Murdoch: But it is something we are keeping a close eye on. Um, and then on Tubi, how does Tubi look over the next three years? Well, Tubi continues to grow. Obviously, as you get the scale, you know, the growth trajectory, which is just harder to compare with the growth that we've had over the last couple of years.

Lachlan Murdoch:

Lachlan Murdoch: And then on to be what is how does tubular over over the next three years to be continues to grow obviously as we get to scale.

Lachlan Murdoch: But Tubi continues to grow. Money will continue to flow from linear entertainment, television, you know, particularly cable entertainment networks into streaming, streaming, AVOD, and SVOD with advertising-supported SVOD services. That trend will not slow, and Tubi will be one of the main beneficiaries of that money flow. So we're confident in the continued growth of Tubi. And under the leadership of Anjali, it just goes like, Operator, we have time for one more question. Okay, that question comes from the line of Michael Morris from Guggenheim. Please go ahead.

Michael Morris: The growth trajectory, which is <unk>.

Lachlan Murdoch: Harder to comp with the growth that we've had over the last couple of years, but to be continues to grow.

Lachlan Murdoch: Money will continue to flow from linear.

Lachlan Murdoch: Payment.

Lachlan Murdoch: TV, particularly.

Lachlan Murdoch: Particularly cable.

Michael Morris: Entertainment networks or into streaming.

Speaker Change: Dreaming, a bourdon and asphalt.

Lachlan Murdoch: Advertising supported asphalt services that that trend will not.

Lachlan Murdoch: We will not slow and Toby will be one of the main beneficiaries of that money flow. So so we're confident in the continued growth of <unk> and under the leadership of annually. It just goes from strength to strength.

Michael Morris: Operator, we have time for one more question.

Lachlan Murdoch: Okay that question comes from the line of Michael Morris from Guggenheim. Please go ahead.

Michael Morris: Thank you. Good morning, guys. I have two questions, if I could.

Michael Morris: Thank you good morning, guys two questions if I could the first one is on the JV and <unk>.

Michael Morris: Some of your existing distribution partners have brought up concerns that it's.

Michael Morris: Somewhat unfair to them for you to have a sports only JV.

Michael Morris: It seems that you would disagree by virtue of the fact that you are moving forward. So I'd love if you could address that.

Michael Morris: Those concerns and whether you think there will be changes in the marketplace or or whether you think those concerns were unfounded.

Michael Morris: And the second question a bit more on the model.

Michael Morris: Professor Steve TV profit was I think notably strong in the quarter given that on a year over year basis, you did not have the Super Bowl or those extra playoff games. So can you maybe unpack a little bit we would think that those types of events would be.

Lachlan Murdoch: We would think that those types of events would be uniquely profitable. So to show profit growth as you compare those challenges, I'd be curious if you could talk about sort of the sustainability and whether maybe we're over-estimating how profitable those games are. Thank you. Thanks, Mike.

Lachlan Murdoch: So on the sports joint venture and how we certainly view it and how we discuss it with our distribution partners, I think the first thing, and this is incredibly important to us, is that we are wholly and fundamentally supportive of the traditional cable television bundle. It will continue to be for a very long time our number one revenue stream, and we are all in to supporting our distributors in every way we can in that bundle and supporting their subscribers and their business. So that is absolutely a fundamental fact for us.

Steve: Thanks, Mike I'll, let me, let me start.

Steve: So on the.

Lachlan Murdoch: Sports joint venture and how we certainly view it and how we.

Speaker Change: I'll discuss it.

Lachlan Murdoch: With our distribution partners I think that the.

Lachlan Murdoch: First and this is.

Lachlan Murdoch: Sure.

Lachlan Murdoch: Incredibly important to us is that we are.

Lachlan Murdoch: Holy.

Lachlan Murdoch: Fundamentally supportive of the traditional cable TV bundle. It will continue to be for a very long time, our number one.

Lachlan Murdoch: Our revenue stream.

Lachlan Murdoch: And we are we are all in to support our distributors in every way we can.

Lachlan Murdoch: In that.

Lachlan Murdoch: In that bundle and supporting their subscribers and their business. So that's that is absolutely a fundamental.

Lachlan Murdoch: Having said that, we've always said that it's important for us to put our brands where viewers are, right? And in the universe of sports fans that don't currently take a cable bundle, that is the universe that the sports joint venture will be entirely focused on. And it's frankly important to us that, because we are so invested in the cable bundle, the sports joint venture will be very targeted and very focused on the non-traditional pay TV viewer universe.

Lachlan Murdoch: Fact for us.

Lachlan Murdoch: Having said that we've always had it's important for us to put our brands where.

Lachlan Murdoch: Where viewers are right and in the universe of.

Lachlan Murdoch: Sports fans that don't currently take.

Lachlan Murdoch: A cable bundle that is the universe that.

Lachlan Murdoch: The sports joint venture will be entirely focused on and Thats frankly important to us.

Lachlan Murdoch: Because we are so invested in the in the eye.

Lachlan Murdoch: In the in the cable bundle, that's a sports joint venture will be very targeted and very focused on.

Lachlan Murdoch: The non traditional pay TV.

Lachlan Murdoch: Viewer.

Lachlan Murdoch: Viewer universe, and we think we can.

Lachlan Murdoch: Very cleverly in very in a very targeted way market to those subscribers. So that we minimize any cannibalization of the traditional of traditional.

Lachlan Murdoch: And we think we can very cleverly and in a very targeted way market to those subscribers so that we minimize any cannibalization of the traditional subscribers. So we're very open with our distributors. We're very open with how important they are to us and also how, because of that importance, we can focus a sports joint venture in the areas it needs to be focused. Mark, it's Steve.

Lachlan Murdoch: Subscribers.

Lachlan Murdoch: So.

Lachlan Murdoch: So we're very open with our distributors were very open with how important they are to us and also how because of that importance. How we can focus on sports joint venture and the areas that needs to be to be focused on.

Steven Silvester Tomsic: Just in terms of television profitability, so..., quarter to quarter, we were up close to thirty million dollars. The way to think about it is that the single biggest event was the Super Bowl, which was a high tens of millions of dollars in EBITDA contribution last year versus this year. But then you look at it this year, to offset that, we grew affiliate fees in the segment by about $70 million. And so, one for the other, basically, is a push.

Lachlan Murdoch: Mark It's Dave just in terms of TV profitability.

Steven Silvester Tomsic: Quarter to quarter, we were up close to $30 million is the way to think about it is the single biggest event with Super Bowl, which was a high tens of million dollars EBITDA contribution last year versus this year.

Steven Silvester Tomsic: But then you look at it this year to offset that we grew affiliate fee in this segment by about $70 million.

Steven Silvester Tomsic: One for the other basically is a push to be was it a push quarter on quarter in terms of EBITDA deficit. There and so then what's left is the biggest EBITDA sort of driver of contribution when you look at it from a quarter on quarter perspective is the change in entertainment programming costs, which was <unk>.

Steven Silvester Tomsic: Tubi was a push, quarter-on-quarter, in terms of EBITDA deficit there. And so then, what's left is the biggest EBITDA, sort of, driver of contribution, when you look at it from a quarter-on-quarter perspective, is the change in entertainment programming costs, which was.., an ongoing push from scripted towards unscripted to get dollar cost per hour down without harming dealership as well as the impact of the strikes and so there's a lot of other puts and takes in there but they're sort of the big three things.

Steven Silvester Tomsic: Ongoing push towards.

Steven Silvester Tomsic: From scripted towards unscripted to get dollar cost per hour down without.

Steven Silvester Tomsic: <unk> dealership as well as the impact of the strikes.

Steven Silvester Tomsic: There's a lot of other puts and takes in there that they are the sort of the big three things that drive it.

Steven Silvester Tomsic: At this point, we are out of time. But if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us. Ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.

Speaker Change: At this point, we are out of time, but if you have any further questions. Please give me or Charlie can standalone call. Thanks, so much for joining us today.

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

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