Q2 2024 Paramount Global Earnings Call

[music].

Felicia Norby: Good afternoon, my name is Felicia Norby, the conference operator today.

Good afternoon.

Lisa: My name is Lisa and I'll be the conference operator today.

Felicia Norby: At this time, I would like to welcome everyone to Paramount Global's Q2 2024 earnings conference call. At this time, all lines have been muted to prevent any background noise.

Speaker Change: At this time I would like to welcome everyone to Paramount Global Q2, 2024 earnings Conference call.

Speaker Change: At this time all lines have been muted to prevent any background noise.

Felicia Norby: After the speakers remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by one on the telephone keypad. If you'd like to withdraw your question, please press star followed by two. In order to get to as many questions as possible, we ask that you please limit yourself to one question.

Speaker Change: After the Speakers' remarks, there will be a Q&A session.

Speaker Change: I would like to ask a question. During this time simply press star followed by one on the telephone keypad, if you'd like to withdraw your question. Please press star followed by two.

Speaker Change: In order to get to ask many questions as possible. We ask that you. Please limit yourself to one question.

Jaime Morris: At this time, I would like to turn the call over to Jamie Morris, Paramount Global's EVP Investor Relations. You may now begin your conference call.

Jamie Morris: At this time I would like to turn the call over to Jamie Morris Paramount Global EVP Investor Relations you May now begin your conference call.

Jaime Morris: Good afternoon, everyone. Thank you for taking the time to join us for our second quarter 2024 earnings call. Joining me for today's discussion are Paramount's Co-CEOs, Brian Robbins, Chris McCarthy and George Cheeks, and our CFO, Naveen Chopra. Please note that in addition to the earnings release, we have trending schedules containing supplemental information available on our website. Before we start this afternoon, I want to remind you that certain statements laid on this call are forward-looking statements that involve risks and uncertainties.

Jamie Morris: Good afternoon, everyone. Thank you for taking the time to join US for our second quarter 2024 earnings call. Joining me for today's discussion are Paramount co Ceos, Brian Robbins, Chris Mccarthy, and George Cheeks, and our CFO <unk> Chopra.

Jaime Morris: These risks and uncertainties are discussed in more detail on our filings with the SEC. Some of today's financial remarks will focus on the justice results. Reconciliation of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contains supplemental information and in each case can be found in the Investor Relations section of our website.

Speaker Change: Please note that in addition to the earnings release, we have trending schedules containing supplemental information available on our website.

Speaker Change: Before we start this afternoon I want to remind you that certain statements made on this call are forward looking statements that involve risks and uncertainties.

Jamie Morris: These risks and uncertainties are discussed in more detail in our filings with the SEC.

Jamie Morris: Some of today's financial remarks will focus on adjusted results Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information and in each case can be found in the Investor Relations section of our website now I will turn the call over to Brian.

Brian Robbins: Now, I will turn the call over to Brian. Good afternoon, everyone. Thank you for joining our second quarter earnings call. I'm Brian Robbins, and I'm here with my fellow CEO, Chris McCarthy and George Cheeks. Today, we look forward to updating you on the results of the quarter and the progress we have made on our strategic plan. That includes streamlining the organization, transforming D2C and optimizing our asset mix.

Brian Robbins: Good afternoon, everyone. Thank you for joining our second quarter earnings call I'm, Brian Robbins, and I'm here with my fellow Ceos, Chris Mccarthy and George Cheeks today, we look forward to updating you on the results of the quarter and the progress we have made on our strategic plan that includes streamlining the organization transforming <unk>.

Brian Robbins: And optimizing our asset mix.

Brian Robbins: We have been aggressively advancing this plan since we laid it out at our annual meeting of stockholders in early June, but before we jump in, we'd like to spend a few moments on the transaction with SkyDance Media. As you know, on July 7, Paramount Global announced the signing of a definitive merger agreement with SkyDance, which includes a 45-day go-shop period. We expect to deal the close in the first half of next year. In the meantime, the SkyDance and Redbird teams support our strategic plan, and we are continuing to operate business as usual.

Brian Robbins: We have been aggressively advancing this plan since we laid out at our annual meeting of stockholders in early June but before we jump in wed like to spend a few moments on the transaction with Sky Dance media.

Brian Robbins: As you know on July 7th Paramount Global announced the signing of a definitive merger agreement with Sky Dance, which includes a 45 day go shop period.

Brian Robbins: We expect the deal to close in the first half of next year in the meantime, the Sky dance in Redbird teams support our strategic plan and we are continuing to operate business as usual.

Brian Robbins: With that, let's get into our second quarter results and share more details of our progress.

Speaker Change: With that let's get into our second quarter results and share more details of our progress and then <unk> will take us through the financials in depth in.

Naveen Chopra: Medinavine will take us through the financials in-depth. In the quarter, we saw strong results both in terms of our financials and our content. A few highlights include 43% growth in total company adjusted orbiter, largely driven by improvement in D2C. Paramount Plus increased revenue 46% year-over-year.

Speaker Change: In the quarter, we saw strong results both in terms of our financials and our content.

<unk>: A few highlights include 43% growth in total company adjusted OIBDA, largely driven by improvement in <unk> to see.

Speaker Change: Paramount plus increased revenue, 46% year over year.

Brian Robbins: Director. Our content continues to show strength across TV, streaming, and theatrical. And we renewed and expanded our long-standing partnership with one of our largest affiliates, Charter.

Speaker Change: Our content continues to show strength across TV streaming and theatrical.

Speaker Change: And we renewed and expanded our long standing partnership with one of our largest affiliates charter.

Brian Robbins: As we said before, we've been very focused on modernizing our relationships with distributors, and this innovative, multi-year partnership with Charter is a prime example of how we're doing that. The renewal includes the continued courage of our portfolio of linear cable networks, and CBS owned and operated broadcast stations. Also around Labor Day, our Paramount Plus essential ad supported here will be available to Charter's linear customers. Together, we're enhancing the value we're delivering for our consumers, providing them even more ways to watch our big broad hits across linear and streaming. And for us, it has the potential to expand reach and engagement, lower our customer acquisition costs, and yield much lower churn. And we view this as one potential partnership roadmap for future distributor renewals.

Speaker Change: As we've said before we've been very focused on modernizing our relationships with distributors and this innovative multi year partnership with charter is a prime example of how we're doing that.

Speaker Change: The renewal includes the continued carriage of our portfolio of linear cable networks and CBS owned and operated broadcast stations also around labor day are Paramount plus the central AD supported tier will be available to charters with linear customers.

Speaker Change: Together, we're enhancing the value we're delivering for our consumers providing them even more ways to watch our big broad hits across linear and streaming and for US. It has the potential to expand reach and engagement lower our customer acquisition costs and yield much lower churn and we view this.

Speaker Change: As one potential partnership roadmap for future distributor renewals. In addition to charter just last week, we announced a multi year agreement with Nexstar to renews CBS television network affiliations in 40 markets across the country.

Brian Robbins: In addition to Charter, just last week, we announced a multi-year agreement with Next Star to renew CBS Television Network Affiliations in 40 markets across the country. So, we continue to have good momentum with our partners.

Speaker Change: We continue to have good momentum with our partners.

Chris Mccarthy: Now, I'd like to turn the call over to Chris to take you through the upfront and the highlights of our plan. Thank you, Brian, and good afternoon, everyone. We are pleased with our upfront results, particularly in the context of the evolution of the ad market and the scale of new entrants. Linear volume trends were in line with last year, and CPMs were up on a blended basis driven by sports and broadcasts which were relatively strong.

Speaker Change: Now I'd like to turn the call over to Chris to take you through the upfront and the highlights of our plan.

Chris: Thank you, Brian and good afternoon, everyone. We are pleased with our upfront results, particularly in the context of the evolution of the AD market and the scale of new entrants.

Chris: Linear volume trends were in line with last year, and Cpm's were up on a blended basis, driven by sports and broadcast which were relatively strong.

Chris Mccarthy: The digital marketplace was also healthy. We secured commitments in excess of $1 billion across our streaming portfolio, reflecting both the quality and the scale of our assets. With our mix of pay and free, we offer the most efficient reach across premium video.

Chris: The digital marketplace was also healthy we secured commitments in excess of $1 billion across our streaming portfolio.

Chris: Reflecting both the quality and the scale of our assets.

Speaker Change: With our mix of pay and free we offer the most efficient reach across premium video.

Chris Mccarthy: Now, let's walk through the progress of making against our strategic plan, starting with streamlining the organization. We announced in June that we've identified 500 million in annual run rate cost savings across the company. This 500 million dollars is included in the 2 billion of cost efficiencies identified by Skydance. To realize these savings, we are reducing our US-based workforce by approximately 15 percent, and we are primarily focused on two areas. First, redundant functions within marketing and communications.

Speaker Change: Now, let's walk through the progress that we're making against our strategic plan.

Speaker Change: Starting with streamlining the organization.

Chris: Now through June that we've identified $500 million in annual run rate cost savings across the company.

Sky dance: This $500 million is included in the $2 billion of cost efficiencies identified by Sky dance.

Chris: To realize these savings we are reducing our U S based workforce by approximately 15%.

Speaker Change: And we're primarily focused on two areas.

Speaker Change: First redundant functions within marketing and communications.

Chris Mccarthy: Second, streamlining our corporate structure, reducing our headcount and finance, legal, technology, and other support functions. These actions will take place in the coming weeks and will largely be completed by the end of the year. As you can imagine, these are difficult decisions to make. We've incredibly talented people at Paramount, and these actions are not a reflection of their contributions. Rather, they are necessary to transform our organization for the future.

Speaker Change: Second streamlining our corporate structure, reducing our head count in finance legal technology and other support functions.

Speaker Change: These actions will take place in the coming weeks and will largely be completed by the end of the year.

Speaker Change: As you can imagine these are difficult decisions to make we have incredibly talented people at Paramount and these actions are not a reflection of our contributions.

Speaker Change: Rather they are necessary to transform our organization for the future.

Chris Mccarthy: Next, transforming streaming. We are pleased with the progress that we've made and the performance of our direct-to-consumer segment. In Q2, year-over-year profit growth was $450 million, and totaled nearly $900 million to the past four quarters. For the fourth year in a row, Paramount Plus was leading the industry and sign-ups, driven by our big broad hit TV series and Blackbuster films. And Pluto continues to be the most widely distributed global fast service, delivering 3.7 billion hours for the first half of 2024. That's up 8% year-rear, and that marks our highest consumption ever.

Speaker Change: Next transforming streaming.

Speaker Change: We are pleased with the progress that we've made and the performance of our direct to consumer segment.

Speaker Change: In Q2 year over year profit growth was $450 million and totaled nearly $900 million to the past four quarters.

Speaker Change: For the fourth year in a row, Paramount pluses, leading the industry in sign ups driven by our big broad hit television series and blockbuster films.

Speaker Change: <unk> continues to be the most widely distributed global fast service delivering $3 7 billion hours for the first half of 2024, that's up 8% year over year and that marks our highest consumption ever.

Chris Mccarthy: Now looking ahead, we remain confident that Paramount Plus will reach domestic profitability in 2025. In addition, to further accelerate profitability and to increase our scale and engagement, we are exploring potential strategic partnerships with multiple parties and are in active discussions.

Speaker Change: Now looking ahead, we remain confident that Paramount plus will reach domestic profitability in 2025.

Speaker Change: In addition to further accelerate profitability and to increase our scale and engagement, we are exploring potential strategic partnerships with multiple parties and are in active discussions.

Chris Mccarthy: Finally, optimizing our asset mix. We are aggressively evaluating our portfolio with the goal of improving our balance sheet. The set of assets that make a Paramount Global today were built up through the rise of linear. And while we have strong brands and businesses, we must reshape our portfolio to best compete in the future. The assets under consideration are undeniably strong with exciting futures ahead, but will be better served on their own, or as a centerpiece of another business. We look forward to updating you on our progress against the strategic plan over the coming quarters.

Speaker Change: Finally, optimizing our asset mix, we are aggressively evaluating our portfolio with the goal of improving our balance sheet.

Speaker Change: The set of assets that make a paramount global today were built up through the rise of linear and while we have strong brands and businesses, we must reshape our portfolio to best compete in the future.

Speaker Change: The assets under consideration are undeniably strong with exciting futures ahead, but.

Speaker Change: So it will be better served on their own or is the centerpiece of another business.

Speaker Change: We look forward to updating you on our progress against our strategic plan over the coming quarters.

George Cheeks: And now, I'll turn the call to the George to highlight our key content wins in the quarter and talk about what's coming next. Thanks, Chris. Our core mission centers on what we do best, creating big, broad hits. This is our first priority, as well as our competitive advantage. Now, in Q2, we have a number of key wins. CBS finished the 2324 season as the number one broadcast network in total viewers for the 16th consecutive year.

Speaker Change: And now I'll turn the call over to George to highlight our key content wins in the quarter and talk about what's coming next.

George: Thanks, Chris.

George: Our core mission centers on what we do best creating big broad hits. This is our first priority as well as our competitive advantage.

George: Now in Q2, we had a number of key wins CBS finished the 'twenty three 'twenty four season as the number one broadcast network in total viewers for the 16th consecutive year. We've made it a top 10 shows and the three most watched new broadcast series with tracker alphabet, and Ncis Sydney on Paramount plus.

George Cheeks: We've made it a top 10 shows and the three most watched new broadcast series with tracker, L-Beth, and NCIS Sydney. On Paramount Plus, our strong slate drove excellent results, including the return of mayor of Kingston, criminal minds, evil, repulsed drag race, and the shy. We also launched new shows like the South Park Special, the end of obesity, the Sonic the Hedgehog spin-off series Knuckles, and a gentleman in Moscow from Showtime. Q2 brought Bob Marley one love and the UEFA Champions League final to P-plus as well.

Speaker Change: Our strong slate drove excellent results, including the return of mayor of Kingstone criminal minds evil Rupaul drag race and the shy. We also launched new shows like the South Park special at the end of obesity and the Sonic the Hedgehog spinoff series Knuckles, and a gentleman in Moscow from Showtime.

George: Q2 brought Bob Marley, one love and the UEFA Champions League final to P plus as well.

George Cheeks: On Comedy Central, the daily show with John Stewart is posting significant performance gains, while engagement on Paramount Plus is outperforming last season by over seven times. Over a Paramount Pictures, John Krasinski's IF delivered another number one domestic box office launch, and a quiet place day one saw franchise best performance, beating industry expectations and grossing over $250 million in worldwide box office to date.

Speaker Change: On comedy Central the Daily show with Jon Stewart is posting significant performance gains while engagement Paramount pluses outperforming last season by over seven times.

George: Over at Paramount Pictures, John Krasinski, if delivered another number one domestic box office launch and a quiet place day, one saw franchise best performance, beating industry expectations and grossing over $250 million in worldwide box office to date.

George Cheeks: Now to keep this momentum going, we plan the most ambitious slate yet for Paramount Plus. This includes new seasons of Taylor Sheridan's hit series Tulsa King in September, Lioness in October, and the new series Landman in November, as well as the series finale of Evil and Seal Team. The showtime slate kicks off with the new series The Agency from George Clooney, and in December, Showtime's biggest franchise ever returns with Dexter original sense.

George: Now to keep this momentum going we plan the most ambitious slate yet for Paramount plus this.

Speaker Change: This includes new seasons of Taylor's Sheraton's hit series Tulsa King in September Lyonnesse in October and the New series land Man in November as well as the series finales of evil and seal team.

George: <unk> see it kicks off with the New series the agency from George Clooney and in December Showtime's biggest franchise ever returns with Dexter original sin.

George Cheeks: 10. Also heading to Paramount Plus, our recent box office hits, the new CBS primetime slate, the new NFL season, and our first full season of Big 10 College Football. The next season's primetime schedule on CBS is one of the strongest I've seen. In addition to 16 returning series, the new shows will include a spin-off of Youngsheldon, the number one comedy on TV, a contemporary reimagining of the classic series Matlock, and a new addition to the NCIS universe.

Speaker Change: Also heading to Paramount plus our recent box office hits, the news CBS Primetime slate the new NFL season in our first full season of Big 10 College football.

Speaker Change: Next season's primetime schedule on Cvs is one of the strongest Ive seen in addition to 16 returning series. The new shows will include a spinoff of young Sheldon and the number one comedy on television.

George: Temporary re imagining of the classic series Matlock and a new addition to the Ncis universe.

George Cheeks: And coming soon to movie theaters, we're releasing the first animated Transformers film in nearly 40 years, starring voice cast Chris Hemsworth and Scarlett Johansson. That's followed by Smile 2, the sequel to one of the most profitable films in the studio's history. In November, Sir Really Scott returns to the arena with the highly anticipated Gladiator 2, which just saw its first trailer become one of the most viewed ever for Paramount. Then we'll finish the year with Sonic the Hedgehog 3.

Speaker Change: And coming soon in movie theaters, we're releasing the first animated Transformers film in nearly 40 years, starring voice cast, Chris Hemsworth and Scarlett Johansson.

George: That's followed by Smile to the sequel to one of the most profitable films in the studio's history.

Speaker Change: In November so really Scott returned to the arena with the highly anticipated Gladiator too, which just saw its first trailer become one of the most viewed ever for Paramount double finished the year with Sonic the Hedgehog III.

George Cheeks: If we really want to underscore our commitment to operating the business with best-in-class content at the center, we'll continue to deliver millions of fans around the world. We've got the best creators in the business, and we're incredibly grateful for their contributions.

Speaker Change: But we really want to underscore our commitment to operating the business with best in class content at the center will continue to deliver for millions of fans around the world.

George: Got the best created in the business and we're incredibly grateful for their contributions.

Naveen Chopra: Thanks so much for joining us today, and with that, I'll turn it over to Naveen. Thank you, George, and good afternoon, everyone. Our Q2 results demonstrate strong execution, continued evolution of our distribution and monetization strategies, and the ongoing power of our creative engines. Financially speaking, this translated to 43% growth in adjusted oibida, reflecting significant improvement in our D2C business, which is delivering healthy top-line growth and improved operating motion. Additionally, balance sheet leverage improved by one-third of a turn since the end of Q1.

Speaker Change: Thanks, so much for joining us today and with that I'll turn it over to Nadeem.

Nadeem: Thank you George and good afternoon, everyone.

Nadeem: Our Q2 results demonstrate strong execution continued evolution of our distribution and monetization strategies and the ongoing power of our creative engines.

Nadeem: Financially speaking this translated to <unk>, 43% growth in adjusted OIBDA, reflecting significant improvement in our DTC business, which is delivering healthy topline growth and improved operating margin.

Speaker Change: Additionally, balance sheet leverage improved by one third of a turn since the end of Q1.

Naveen Chopra: As always, you'll find a comprehensive review of Q2 results in our press release, so today I'm going to focus on a few areas of note. First advertising. In Q2, direct-to-consumer advertising grew 16%, benefiting from increased viewing hours across Paramount Plus and Pluto TV, along with higher CPMs. In TV media, overall domestic advertising trends were negatively impacted by the fact that sports comprise a smaller share of inventory than it has in recent quarters.

Speaker Change: As always you'll find a comprehensive review of Q2 results in our press release, so today I'm going to focus on a few areas of note.

Speaker Change: First advertising.

Nadeem: In Q2 direct to consumer advertising grew 16% benefiting from increased viewing hours across Paramount plus and Pluto TV along with higher Cps.

Speaker Change: In TV media overall domestic advertising trends were negatively impacted by the fact that sports comprised a smaller share of inventory than it has in recent quarters.

Naveen Chopra: This dynamic somewhat massed the fact that year-over-year growth in non-sports domestic advertising improved relative to Q1. On a total company basis, advertising declined 6% in the quarter. Looking ahead, we expect D2C advertising growth in Q3 to be similar to Q2. And in linear, we expect advertising trends in the second half 24 to improve with the return of live sports, new fall programming, and contribution from political spend. Next, let me turn to affiliate and subscription revenue, which grew 1% in Q2.

Nadeem: This dynamic somewhat masked the fact that year over year growth in non sports domestic advertising improved relative to Q1.

Nadeem: On a total company basis advertising declined 6% in the quarter.

Speaker Change: Looking ahead, we expect DTC advertising growth in Q3 to be similar to Q2 and in linear we expect advertising trends in the second half of 'twenty four to improve with the return of live sports New fall programming and contribution from political spend.

Speaker Change: Next let me turn to affiliate and subscription revenue, which grew 1% in Q2.

Naveen Chopra: As a reminder, last year's second quarter included a showtime pay-per-view event that did not take place this year due to our exit from showtime sports at the end of 2023. This comparison reduced the Q2 growth rate by 250 basis points. Data C subscription revenue grew 12% in the quarter with Paramount Plus subscription revenue up 50% year-over-year. Paramount Plus finished the quarter with 68.4 million subscribers, which is 2.8 million lower than the end of Q1.

Speaker Change: As a reminder, last year's second quarter included a Showtime pay per view event that did not take place this year due to our exit from Showtime sports at the end of 2023.

Speaker Change: This comparison reduced Q2 growth rate by 250 basis points.

Speaker Change: <unk> subscription revenue grew 12% in the quarter with Paramount plus subscription revenue up 50% year over year.

Speaker Change: Paramount plus finished the quarter with $68 4 million subscribers, which is $2 8 million lower than the end of Q1.

Naveen Chopra: At two factors impacted subscriber growth this quarter, both of which were built into our expectations for the full year. The biggest factor by far was the planned exit of our heart bundle partnership with Teaving in South Korea, which contributed a sizeable number of subs, but limited revenue in Oibida. Second, domestic subgrowth, though still positive, was hindered by elevated churn from the cohort or subscribers that joined for the Super Bowl in Q1.

Speaker Change: Two factors impacted subscriber growth this quarter, both of which were built into our expectations for the full year.

Speaker Change: The biggest factor by far was the planned exit of our hard bundled partnership with teething in South Korea.

Speaker Change: Which contributed a sizable number of subs, but limited revenue and OIBDA.

Nadeem: Second domestic sub growth, though still positive.

Nadeem: Hindered by elevated churn from the cohort of subscribers that joined for the Super Bowl in Q1.

Naveen Chopra: And we expect Paramount Plus to return to net subscriber growth in the second half of the year, as we benefit from a more consistent cadence of original content, now that we're beyond the impacts of the strike. We also expect normalized international subscriber growth for the remainder of the year. Paramount Plus Global ARPU expanded 26% in the quarter, reflecting the impact of the price increase that took effect in Q3 of 2023. As well as a shift in the mix of our international subscriber base to higher ARPU markets.

Nadeem: And we expect Paramount plus to return to net subscriber growth in the second half of the year as we benefit from a more consistent cadence of original content now that we're beyond the impacts of the strike.

Nadeem: We also expect normalized international subscriber growth for the remainder of the year.

Nadeem: Paramount plus global <unk> expanded 26% in the quarter, reflecting the impact of the price increase that took effect in Q3 of 2023.

Nadeem: As well as a shift in the mix of our international subscriber base to higher RP markets.

Naveen Chopra: And as we announced in June, a subsequent domestic price increase will take effect later this month. Monthly pricing for new Paramount Plus customers on our ad supported tier will move to $7.99. Existing customers will be grandfathered at the current $5.99 price. Monthly pricing on our Paramount Plus which show time tier will increase by $1 to $12.99 for both new and existing customers. We don't expect a meaningful financial impact from the new price increase until Q4, given the time required to implement the price changes across our distribution channels, and because the price increase on the ad supported tier only applies to new customers.

Nadeem: And as we announced in June a subsequent domestic price increase will take effect later this month.

Nadeem: Monthly pricing for new Paramount plus customers on our AD supported tier will move to 799 existing.

Nadeem: Customers will be grandfathered at the current $5 99 price.

Nadeem: Monthly pricing on our Paramount plus with Showtime tier will increase by $1 to $12 99 for both new and existing customers.

Nadeem: And we don't expect a meaningful financial impact from the new price increase until Q4, given the time required to implement the price changes across our distribution channels.

Nadeem: And because of the price increase on the AD supported tier only applies to new customers.

Naveen Chopra: In the TV media segment, affiliate revenue declined 5% year by year, largely reflecting ecosystem trends. Recognizing ongoing changes in the pay TV ecosystem, in Q2 we announced the important multi-year distribution agreement with Charter, which seeks to modernize our longstanding relationship. Starting in Q3, Charter will be the first US MVPD to make the ad supported tier of Paramount Plus available to basic cable subscribers with no incremental cost to the consumer. Accordingly, users who activate a Paramount Plus essential subscription to an MVPD bundle will be counted as Paramount Plus subscribers, and the revenue from Charter and future MVPD distribution deals that bundle Paramount Plus will be shared between our TV media and D to C segments.

Nadeem: In the TV media segment affiliate revenue declined 5% year over year, largely reflecting ecosystem trends.

Nadeem: Recognizing ongoing changes in the pay TV ecosystem.

Nadeem: In Q2, we announced an important multiyear distribution agreement with charter, which seeks to modernize our longstanding relationship.

Nadeem: Starting in Q3 charter will be the first U S. N V PD to make the AD supported tier of Paramount plus available to basic cable subscribers with no incremental cost to the consumer.

Nadeem: Accordingly, users, who activate a paramount plus essential subscription through Mvpds bundle will be counted as paramount plus subscribers.

Nadeem: And the revenue from charter and future Mvpds distribution deals that bundled Paramount plus.

Nadeem: We will be shared between our TV media and <unk> segments.

Naveen Chopra: We believe this type of bundle is an efficient way to grow Paramount Plus and can yield many of the same benefits we've experienced in the international markets where we've adopted a similar approach. These bundles ensure that Paramount and our distributors are full participants in the transition of viewing from linear to string.

Nadeem: We believe this type of bundle is an efficient way to grow Paramount plus and can yield many of the same benefits we have experienced in the international markets, where we've adopted a similar approach.

Nadeem: These bundles ensure that Paramount and our distributors are full participants in the transition of viewing from linear to streaming.

Naveen Chopra: Gaming. Looking ahead to Q3, we expect TV media affiliate revenue growth to decelerate modestly relative to Q2, reflecting the dynamics I just mentioned and the impact of exiting showtime sports. Next, I'll touch on licensing. Our licensing and other revenue declined 35%. As I've noted previously, licensing revenue growth tends to be bumpy due to the timing of deliveries, and that continued to be the case in Q2 as there were fewer deliveries in the period relative to Q2 of 2023.

Nadeem: Looking ahead to Q3, we expect TV media affiliate revenue growth to decelerate modestly relative to Q2, reflecting the dynamics I, just mentioned and the impact of exiting Showtime sports.

Nadeem: Next I'll touch on licensing our.

Nadeem: Our licensing and other revenue declined 35%.

Nadeem: As I've noted previously licensing revenue growth tends to be bumpy due to the timing of deliveries.

Nadeem: And that continued to be the case in Q2 as there were fewer deliveries in the period relative to Q2 of 2023 four.

Naveen Chopra: For example, Q2 of last year included delivery of the final season of Jack Ryan. The quarter was also impacted by a lower volume of licensing in the secondary market. And we expect licensing revenue to return to growth in the second half of the year, particularly with a return of a new fall slate on CBS in Q4, although we do expect a modest decline in licensing revenue for the full year.

Nadeem: For example, Q2 of last year included delivery of the final season of Jack Ryan.

Nadeem: The quarter was also impacted by a lower volume of licensing in the secondary market.

Nadeem: And we expect licensing revenue to return to growth in the second half of the year, particularly with the return of a new fall slate on CBS in Q4.

Nadeem: Although we do expect a modest decline in licensing revenue for the full year.

Naveen Chopra: In parallel with our efforts to maximize revenue, we're also highly focused on unlocking incremental cost savings. And as you've heard Chris, George, and Bryan describe, we've identified opportunities to streamline the organization that are expected to yield 500 million of annualized cost reductions. Importantly, this 500 million is included in the 2 billion of cost efficiencies identified by Skydance, and we're aligned in moving quickly to realize them. We expect to execute these actions in the coming weeks such that we can reach the full $500 million run rate expense reduction as we enter 2025. And in connection with these actions, we expect to incur a restructuring charge of approximately three to 400 million in Q3, the cash impact of which will occur over the next several quarters.

Nadeem: In parallel with our efforts to maximize revenue. We're also highly focused on unlocking incremental cost savings.

Speaker Change: And as you've heard Chris George and Brian described we've identified opportunities to streamline the organization that are expected to yield $500 million of annualized cost reductions.

Speaker Change: Importantly, this $500 million is included in the $2 billion of cost efficiencies identified by Sky dance.

Nadeem: And we are aligned and moving quickly to realize them.

Nadeem: We expect to execute these actions in the coming weeks such that we can reach the full $500 million run rate expense reduction as we enter 2025.

Nadeem: And in connection with these actions, we expect to incur a restructuring charge of approximately $3 million to $400 million in Q3.

Nadeem: The cash impact of which will occur over the next several quarters.

Naveen Chopra: The last part of our Q2 results I want to address is the good will impairment charge recorded in the quarter. During Q2, we assess the relevant factors that could impact the fair value of our reporting units, including the estimated total company market value indicated by the Skydance transactions and recent indicators in the linear affiliate marketplace. As a result, we recorded a $6 billion non-cash goodwill impairment charge for our cable networks reporting unit at TV media.

Nadeem: The last part of our Q2 results I want to address is the goodwill impairment charge recorded in the quarter.

Nadeem: During Q2, we assess the relevant factors that could impact the fair value of our reporting units, including the estimated total company market value indicated by the Sky dance transactions.

Nadeem: And recent indicators and the linear affiliate marketplace.

Nadeem: As a result, we recorded a $6 billion noncash goodwill impairment charge for our cable network's reporting unit at TV media.

Naveen Chopra: Now, before moving on to questions, I'd like to share some additional information regarding our expectations for the remainder of the year. Our D to C segment was possible this quarter. Our first possible quarter since Paramount Plus launched three and a half years ago. And although the segment will generate losses in Q3 and Q4 due to the timing of content expenses, we're on course to achieve Paramount Plus domestic profitability in 2025. And for the full year 2024, the progress in D to C profitability means we continue to expect significant growth in total company, Oibita, and free cash flow will grow relative to 2023.

Nadeem: Now before moving on to questions I'd like to share some additional information regarding our expectations for the remainder of the year.

Nadeem: Our <unk> segment was profitable this quarter, our first profitable quarter since Paramount plus launched three and a half years ago.

Nadeem: And although the segment will generate losses in Q3, and Q4 due to the timing of content expenses.

Nadeem: We're on course to achieve Paramount plus domestic profitability in 2025.

Nadeem: And for the full year 2024, the progress in D to C profitability means we continue to expect significant growth in total company OIBDA.

Nadeem: And free cash flow will grow relative to 2023.

Naveen Chopra: We continue to operate in a dynamic environment, but it's clear that our focus on execution is producing results. We're not standing still during this interim period before the transaction closes. We remain focused on achieving our goals for 2024, which means investing in key content assets, finding expensive efficiencies, improving profitability, deepening partnerships, and deleveraging our balance sheet. We believe this approach will create value for shareholders over the long term.

Nadeem: We continue to operate in a dynamic environment, but it's clear that our focus on execution is producing results.

Speaker Change: Standing still during this interim period before the transaction closes.

Speaker Change: We remain focused on achieving our goals for 2024, which means investing in key content assets finding expense efficiencies improving profitability deepening partnerships and deleveraging our balance sheet.

Speaker Change: We believe this approach will create value for shareholders over the long term.

Felicia Norby: Would that operator please open the line for questions? Thank you.

Speaker Change: With that operator, please open the line for questions.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Thank you.

Brian Robbins: The first question comes from Michael Morris from Guggenheim. Your line is open. Please go ahead. Thank you. Good afternoon. I wanted to follow up first on Bryan's comments about operating the business during the period between now and when the Skydance Transaction will close. How are you ensuring that these steps that you're taking on things like strategic partnerships that you reference? How are you making sure that those are aligned with the long-term goals after that transaction is completed? Is Skydance involved in these things during the interim period? Also, how do you keep the teams motivated when there's some uncertainty about what the future may hold for the business?

Speaker Change: Question comes from Michael Morris from Guggenheim. Your line is now open. Please go ahead.

Michael Morris: Thank you good afternoon I wanted to follow up first on Brian's comments about operating the business during the period between now and when the Sky dance transaction will close.

Speaker Change: How are you ensuring that these steps that you're taking on things like strategic partnerships that you referenced how are you, making sure that those are aligned with the long term goals. After that transaction is completed is this guidance involved.

Speaker Change: And these things during the interim period and then also how do you how do you keep the team is motivated when there's some uncertainty about what the future may hold for the business. So that's my first question and then maybe for Nevada on the goodwill charge.

Naveen Chopra: That's my first question. Then, maybe for Naveen, on the Goodwill charge, you noted the recent indicators in the linear affiliate marketplace. We're part of what triggered that. Can you expand on that at all? What were the recent indicators that it had to do with the charter agreement? Given the court cutting has been going on for quite a while, why was now the time that that was triggered beyond just the transaction, as you mentioned?

Speaker Change: You noted the recent indicators in the linear affiliate marketplace.

Speaker Change: We're part of what triggered that can you can you expand on that at all but what were the recent indicators that it had to do with the charter agreement.

Speaker Change: And given the cord cutting has been going on for quite a while and why was why was now the time that that was triggered beyond just the transaction as you mentioned thank you.

Naveen Chopra: Thank you. Sure, Mike. This is Brian. I'll jump in first. As I said in the prepared remarks, Skydance is very supportive of our strategic plan. It's business as usual for us, and we continue to green light projects in the normal course of business. Now, in terms of Skydance involvement, it is what you would expect in any M&A transaction. There are very specific limited things that we will consult with them on. But, to the second part of your question, we are just aggressively advancing our strategic plan with our teams.

Speaker Change: Sure Mike This is Brian I'll jump in first.

Speaker Change: As I said in their prepared remarks Sky dance is very supportive of our strategic plan, it's business as usual for us and we continue to greenlight projects in the normal course of business now in terms of guidance involvement. It is what you would expect in any M&A transaction.

Speaker Change: Actually there are very specific limited things that we will consult with them on but to the second part of your question. We are just aggressively advancing our strategic plan with our teams.

Naveen Chopra: We've talked during the prepared remarks about our actions to streamline the organization, our focus on exploring partnerships as we transform Paramount Plus for the future, and beyond going discussions to optimize our asset mix. We believe our plan will create value for shareholders over the long term. Thanks, Brian. Mike, let me respond to your question on the goodwill in Paramount Charge. There's really a couple of things going on there. First, obviously, linear declines are part of the analysis here.

Speaker Change: We've talked during their prepared remarks about our actions to streamline the organization are focused on exploring partnerships as we transform paramount plus for the future and the ongoing discussions to optimize our asset mix and we believe our plan will create value for shareholders over the long term.

Speaker Change: <unk>.

Speaker Change: Okay.

Mike: Thanks, Brian and so Mike let me.

Naveen Chopra: But the other part of this is that it really drives the magnitude of the goodwill in Paramount Charge is the value that's implied by the Skydance transaction. Because the way the accounting works on this is we need to reconcile the value of our individual reporting. Units with the enterprise value for the entire company that's implied by the transaction. So it's really the combination of those things. And, you know, what that results in is the, you know, basically $6 billion non-cash goodwill impairment charge that is specific to our cable network reporting unit. Thanks, Mike.

Mike: Responding to your question on the goodwill.

Felicia Norby: Operator, next question, please. Next question.

Mike: Apparent charge, there's really a couple of things going on there. So first obviously linear declines are part of the analysis here, but the other part of this.

Speaker Change: Is that really drives the magnitude of the goodwill impairment charge is the value that's implied by the Sky dance transaction because the way the accounting works on this is we need to reconcile the value of our individual reporting units with the enterprise value for the.

Mike: Entire company, that's implied by the transaction.

Speaker Change: So it's really the combination of those things.

Speaker Change: And what is.

Speaker Change: That results in is the.

Speaker Change: Basically 6 billion noncash goodwill impairment charge that is specific to our cable network reporting unit.

Speaker Change: Thanks, Mike Operator next question please.

Speaker Change: The next question comes from Robert Fishman from Moffett Nathan. Please go ahead. Your line is open.

Robert Fishman: Question comes from Robert Fishman, from Mofford, Nathan, and please go ahead. Your line is open. Good afternoon, everyone.

Robert Fishman: Hey, good afternoon, everyone.

Robert Fishman: Anything more that you all can share on how you're approaching exploring that the licensing of Paramount Plus content, maybe just originals or just broadly speaking, or are you evaluating that licensing in the context of the other JV structures that you're talking to.

Robert Fishman: Anything more that you can share on how you're approaching exploring that the licensing of Paramount plus content, maybe just originals or just broadly speaking or are you evaluating that licensing in the context of the other JV structures that you were talking to.

Robert Fishman: And then on a separate note, just trying to understand any updated thoughts or how you guys are thinking about using premium sports as part of Paramount Plus, and whether or not the charter deal or future distribution agreements that include Paramount Plus, influence those strategies given the importance that NFL and other content is to the exclusive within the pay TV ecosystem. Thank you. Hey, Robert. It's Chris. I'll take the first half of that.

Speaker Change: And then on a separate note.

Speaker Change: Trying to understand any updated thoughts or how you guys are thinking about using premium sports as part of Paramount plus and whether or not the charter deal our future distribution agreements that include Paramount plus influence those strategies, given the importance that NFL and other content.

Speaker Change: To the exclusive.

Speaker Change: Within the pay TV ecosystem. Thank you.

Speaker Change: Hey, Robert It's Chris I'll take the first half for that and then I have a path to George to talk about the sports piece.

Robert Fishman: And then I have passed the George to talk about sports piece. First, let me start by saying we're very pleased with the success that we've had to date with Paramount Plus, the mass 68 million global subscribers. And the power of our content, both our originals and our library is doing the hard work here, striving a lot of that. Those subscribers and driving our business. Now as we look forward in 2025, we're on path to hit domestic profitability.

Chris Hemsworth: First let me start by saying, we're very pleased with the success that we've had to date with Paramount plus the last six to 8 million global subscribers.

Chris Hemsworth: And the power of our content, both our original and our library.

Chris Hemsworth: The hard work here, it's driving a lot of that.

Chris Hemsworth: The subscribers and driving our business now as we look forward.

Chris Hemsworth: In 2025 were on path to hit domestic profitability, but.

Robert Fishman: But we think there's an opportunity to accelerate that, both just in domestic and globally. And so we're looking at a series of opportunities, whether they come in the form of strategic partnerships or joint ventures. And really, the benefit here is to get greater scale. It better improve our content offering, reduce our cost and drive long term value, and increase profits both in the short term and the long term. And we're exploring all these opportunities. And we're going to be very opportunistic about that. So that includes a series of partnerships that could potentially involve some licensing things, but will also be licensing content in addition to that.

Chris Hemsworth: But we think theres an opportunity to accelerate that.

Chris Hemsworth: And domestic and globally and so we're looking at a series of opportunities whether they come in the form of strategic partnerships or joint ventures.

Chris Hemsworth: Really the benefit here is to get greater scale.

Chris Hemsworth: Better improve our content offerings reduce our costs and drive long term value and increase profits both in the short term and the long term and we're exploring all of these opportunities.

Chris Hemsworth: And we're gonna be very opportunistic about that so that includes a series of partnerships that could potentially involve some licensing but will also be licensing content. In addition to that so.

Chris Mccarthy: So let me toss it over to George to talk about sports. Thanks Chris. So on the sports point, so basically our strategy here and our focus is that broadcast and streaming together, drive an unduplicated audience, and really resolve linear and streaming growth. So when we look at our sort of sports portfolio, we're looking at it through both angles because the beauty of this is that we're seeing growth on both sides. For example, last NFL CPS was up 5% year over year, and the streaming audience on Paramount Plus was up more than 50%. So we're seeing growth for our affiliates and we're seeing growth in streaming.

George: So let me toss it over to George to talk about sports. Thanks, Chris So on the sports point, So basically our strategy here and our focus is that broadcast and streaming together driving on duplicated audience and really resolved linear and streaming growth. So when we look at our sort of sports portfolio. We're looking at it from both angles because the beauty of this.

Felicia Norby: Operator, next question please.

George: We're seeing growth on both sides for example last NFL the NFL.

Speaker Change: NFL on CBS was up 5% year over year and the streaming audience on Paramount pluses up more than 50%. So we're seeing growth for our affiliates and we're seeing growth in streaming.

Chris Hemsworth: Yeah.

Chris Hemsworth: Okay.

Speaker Change: Great next question please.

Ben Swinburn: Next question comes from Ben Swinburn from Morgan Stanley.

Chris Hemsworth: Yeah.

Chris Hemsworth: Next question comes from Ben Swinburne from Morgan Stanley. Please go ahead. Your line is now open.

Ben Swinburn: Please go ahead. Your line is open. Thank you.

Ben Swinburne: Thank you.

Naveen Chopra: Good afternoon, everybody. Naveen, could you tell us a little bit about how you're thinking about free cash flow, second half of the year and kind of where you think leverage might end at your end, because then you can share that with us. And then I think one of the areas that you guys have talked about kind of re-evaluating or evaluating are your international streaming plans, and I know you mentioned the changes in South Korea, but what's the update there?

Ben Swinburne: Good afternoon everybody.

Ben Swinburne: Levine could you tell us a little bit about how you're thinking about free cash flow.

Ben Swinburne: Half of the year and kind of where you think leverage might end at year end to the extent you can share that with US and then I think one of the areas that you guys have talked about kind of reevaluating or evaluating or your international streaming plans and I know you mentioned changes in South Korea, but.

Speaker Change: What's the update there do you guys see an opportunity to kind of optimize this business outside the United States and maybe improve the profitability or reduce the losses. There just would be interested in an update on that front as well. Thank you.

Naveen Chopra: Do you guys see an opportunity to kind of optimize this business outside the United States and maybe improve the profitability or reduce the losses there? Just would be interested in an update on that from as well. Thank you. Yeah, so Ben, I'll take the first part of your question on cash flow and then I'll turn it over to Chris to comment on our thoughts on international streaming. I think that the cash flow answer is actually pretty straightforward.

Speaker Change: Yes, so Ben I'll take the first part of your question on cash flow and then I'll turn it over.

Chris Hemsworth: Chris to comment on.

Chris Hemsworth: Our thoughts on international streaming I think.

Speaker Change: So the answer is actually pretty straightforward.

Naveen Chopra: Yeah, we said at the beginning of the year that our plan was to deliver growth in free cash flow in 24, alongside significant growth in Oiveda, Justin Oiveda. And I continue to see the year playing out that well, so excuse me, playing out that way. So no real change for our expectations. Chris, thanks for me. Hey Ben, listen, you know, today we have a global footprint with Paramount Plus and Pluto and moving forward, we continue, we expect to have a real plan to have, excuse me, a global footprint.

Chris Hemsworth: We said at the beginning of the year that our plan was to deliver.

Chris Hemsworth: Growth in free cash flow in 'twenty, four alongside significant growth in OIBDA adjusted OIBDA.

Speaker Change: And I continue to see the year, playing out that well so excuse me playing out that way so no real change to our expectations.

Chris Hemsworth: Okay.

Chris Hemsworth: Hey, Ben listen today, we have a global footprint with Paramount plus.

Chris Hemsworth: Pluto and moving forward. We continue we expect to have or were planned to have excuse me a global footprint now how that footprint looks may change, we're going to be very opportunistic about exploring all of our options here. The overwhelming majority of the economics are going to be driven out of the U S market as they are today in the <unk>.

Naveen Chopra: Now how that footprint looks may change. We're going to be very opportunistic about exploring all of our options here. The overwhelming majority of the economics are going to be driven out of the US market as they are today in the content space. And so we want to take a thoughtful approach about how we look at each market internationally. Now that could come in the form of strategic partnerships with maybe platforms who already have great tremendous amount of reach in a platform.

Naveen Chopra: In which case, we'll be reducing our cost by not having to have our own platform, or they could come in the form of a joint venture with one or more S5 players. In which case, we could get greater scale, increase long-term value and drive greater profits. So we have lots of interest from many different partners in this area, and we're exploring all of that, and we look forward to updating you as we progress. Thanks Ben.

Rich Greenfield: Operator, next question please. The next question comes from Rich Greenfield from Light Shed Partners.

Chris Hemsworth: In the content space.

Chris Hemsworth: So we want to be take a thoughtful approach about how we look at each market internationally now that can come in the form of strategic partnerships with maybe platforms. We already have great tremendous amount of reach and our platform.

Chris Hemsworth: Which case, we will be reducing our cost by not having to have our own platform or are they could come in the form of a joint venture with one or more <unk> players in which case, we could get greater scale increase long term value and drive greater profits. So we have lots of interest from many different partners in this area and we're exploring all of that and we look forward to updating you.

Chris Hemsworth: As we progress.

Ben Swinburne: Thanks, Ben Operator next question please.

Chris Hemsworth: The next question comes from Rich Greenfield from Nightshirt bottleneck. Please go ahead.

Rich Greenfield: Please go ahead. Hi, thanks for taking the questions. I got a couple. First, just from a very high level, I think you've all talked about the 500 million being inclusive of the two billion from Skydance. Skydance is a pretty small company in the scheme of the media world.

Rich Greenfield: Hi, Thanks for taking the questions I got a couple first just from a very high level I think.

Rich Greenfield: You've all talked about the $500 million being inclusive of the $2 billion from Sky and Sky Dance is a pretty small company in the scheme of the media World.

Rich Greenfield: Could you help us understand what of the two billion couldn't you accomplish without Skydance, meaning could the 500 million be more like a billion and a half on your own, just trying to understand the difference between those two cost-cutting numbers. And then on the charter agreement that you reference, you're going to obviously now be giving Paramount Plus to, you know, I think about nine to 10 million charter video subscribers. Do you actually shift the allocation, meaning if I think about how you account for this between your various divisions, is there now a reduction in how much affiliate revenue is going to the linear networks with a commensurate allocation of dollars to Paramount Plus. Unless I'm just trying to understand as you turn this on to those subscribers.

Speaker Change: Could you help us understand what are the $2 billion Couldnt, you accomplished without sky dance, meaning could the $500 million be more like a 1 billion and a half on your own just trying to understand the difference between those two cost cutting numbers.

Speaker Change: And then on the charter agreement that you.

Speaker Change: You referenced.

Chris Hemsworth: Yes.

Speaker Change: You're going to obviously now be giving Paramount plus.

Chris Hemsworth: Two I think about $9 million to $10 million.

Speaker Change: <unk> video subscribers.

Speaker Change: Actually.

Speaker Change: The allocation, meaning if I think about how you account for this.

Speaker Change: In your various divisions is there now a reduction and how much affiliate revenue is going to the linear networks with a commensurate allocation of dollars to Paramount plus I'm just trying to understand as you turn this on to those subscribers and then just a housekeeping point I think you mentioned is it only charters or sub debt.

Steven Cahall: And then just a housekeeping point. I think you mentioned it's only charter sub that activate that you get that that are counted or does every subscriber get Paramount Plus and is treated as a subscriber on Paramount's books. Thanks so much for taking, in the questions. Yeah, hi, Richard, Steven. I'll try to catch on all of those. So starting with your question on cost savings, as you pointed out, we're moving forward on 500 million of cost savings.

Speaker Change: Activate that you get that are counted or does every subscriber get paramount plus and is treated as a subscriber on paramount's books. Thanks, so much for taking the questions.

Bob Marley: Yeah, Hi, rich its debate I'll try to touch on all of those.

Speaker Change: <unk> with your question on cost savings as you pointed out.

Speaker Change: We're moving forward on $500 million of cost savings, but I think it's important to understand that.

Steven Cahall: But I think it's important to understand that that's sort of step one. We are also working on a variety of other cost reduction plans that are part of our long term plan. Those are significant. They're material. They won't all happen necessarily at the same point in time. And they go beyond headcount. You know, we've made most of the 500 million savings that you'll see in the near term as headcount related. But we do think that there are opportunities to significantly reduce cost in other areas as well.

Speaker Change: Step one we are also working on a variety of other cost reduction plans.

Speaker Change: That are part of our long term plan.

Speaker Change: Those.

Speaker Change: Our significant theyre material they won't all happen necessarily at the same point in time and they go beyond head count.

Speaker Change: Most of the $500 million savings that Youll see in the near term is head count related but we do think that there are opportunities to significantly reduce costs.

Speaker Change: In other areas as well.

Steven Cahall: And you know, those plans, I think have helped inform a number of the ideas that comprise the $2 billion that SkyDance has referenced. With respect to your question on the charter deal, sort of in reverse order, the way that this works is, yes, subscribers who activate that benefit, if you will, meaning they associate their charter account with a set of P plus credentials. Those are subs that we will count as paramount plus subscribers.

Speaker Change: And those plans I think have helped inform a number of the ideas that comprised the $2 billion that guidance has referenced.

Steven Cahall: And if someone does not activate, then they don't count as a sub. And when they do activate, then we start to allocate a certain amount of the fees that we receive from charter to P plus. What you'll see in our externally reported financials as a result of that is that the revenue from deals like charter where we're providing paramount plus credentials in a bundle will be split or be shared between the TV media segment and the D to C segment. Thanks, Rich.

Speaker Change: With respect to your question on the charter deal.

Speaker Change: Sort of in reverse order the way that this works is yes subscribers, who activate that.

Speaker Change: That benefit if you will meaning.

Speaker Change: Associate their charter account with a set of P. Plus credentials those are subs that we will count as Paramount plus subscribers and if someone does not activate them. They don't count as a sub and when they do activate then we start to allocate a certain amount of the fees that we receive from charter to <unk>.

Speaker Change: Plus.

Speaker Change: What youll see in our externally reported financials as a result of that is that the revenue from deals like charter, where we're providing paramount plus credentials in a bundle will be split or be shared between the TV media segment and the DTC segment.

Speaker Change: Thanks, Rich operator next question.

Steven Cahall: Operator, next question. The next question comes from John Hardelick from UBS.

Speaker Change: The next question comes from John Hodulik from UBS. Please go ahead. Your line is open.

John Hardelick: Please go ahead. Your line is open. Great. Thanks. Just to follow up to Rich's question. Anything you can tell us about, and maybe it doesn't matter anymore. Look at this all blended together. But the linear pricing you got on the charter side, on the charter deal. And then I guess from a D to C standpoint, the subscribers have to activate for you guys to get paid.

John Hodulik: Great. Thanks, just a follow up to Richard's question, just anything you can tell us about and maybe it doesn't matter anymore, because it's all blended together, but just the linear pricing you got on the on the charter side on the charter deal and then.

Speaker Change: I guess from a DTC standpoint, the scrubbers have to actively.

Speaker Change: Activate for you guys to get to get paid but number one are you guys going to sort of market the service or what can you do to sort of drive penetration within those charter some base and then do they is there a engagement or sort of consumption.

John Hardelick: But number one, are you guys going to sort of market the service or what can you do to sort of drive penetration within those charter some days? And then do they, is there an engagement or sort of consumption issue as well? Is it once they activate once, then you sort of get paid going forward? Just any color? I'm just trying to get a sense of what the overall economic to that deal are. Thanks. Yeah, sure. John, it's motivating. Let me try to clarify that a little bit.

Speaker Change: Issue as well once they activate once then you sort of get paid going forward.

Speaker Change: Just any color I'm, just trying to get a sense of it.

Speaker Change: With the overall economics of that deal are thanks.

Speaker Change: Yes, sure John let me try to clarify that a little bit.

Naveen Chopra: I think it may be helpful to remember that the way that we structure our deals with distributors, and I'm not going to get into any specific deal, is with a focus on total company economics. That used to be largely about cable and broadcast and premium linear networks. Now it includes all of those things plus obviously paramount plus. House. And so, independent of how those things may be delineated for contractual purposes, for our financial reporting, we allocate those seeds between, as I said earlier, our TV media segment and our D to C segment. So, the revenue that we receive is not contingent on whether somebody activates or not. It's all part of the overall economics of our arrangement with the distributor. Thanks, John.

Speaker Change: It may be helpful to remember that the way that we structure, our deals with distributors and I'm not going to get into any specific deal.

Speaker Change: With a focus on total company economics.

Felicia Norby: Operator, next question?

Speaker Change: That used to be largely about cable and broadcast and premium linear networks. Now. It includes all of those things plus obviously paramount plus.

Speaker Change: And so independent of how those things may be delineated for contractual purposes for our financial reporting we allocate those fees between as I said earlier, our TV media segment and our DTC segment.

Speaker Change: So the revenue that we receive is not contingent on whether somebody activates or not it's all part of the overall economics of our arrangement with the distributor.

John Hodulik: Thanks, John Operator next question.

Steven Cahall: The next question comes from Steven Cahall from Wells Fargo. Please go ahead. Thanks. So, Naveen, just a few more on Paramount Plus profitability. Can you talk about the value of content that you expect on Paramount Plus this year, from an amortization perspective, especially as you move into the back after the year when it's a little heavier. And with the guidance you have for next year, how much do you think that content value is going to grow in 25?

Speaker Change: The next question comes from Steven Cahall from Wells Fargo. Please go ahead.

John Hodulik: Yeah.

Steven Cahall: Thanks, So just a few more on Paramount plus profitability can you talk about the value of content that you expect on Paramount plus this year from an amortization perspective, especially as you move into the back half of the year, when it's a little heavier and with the guidance yet for next year, how much do you think the content value is going to grow.

Speaker Change: <unk> 25, and just a housekeeping one on it you said youll be profitable for Paramount plus in 2025 is that different from 425, and then a positive number for the full year and then also George CBS affiliates. Some out there have been indicating that reverse comp fees should really start to moderate or even decline because of the shift to <unk>.

Steven Cahall: And just a housekeeping one on it, you said you'll be profitable for Paramount Plus in 2025. Is that different from 425 as in a positive number for the full year? And then also, George, CBS affiliates, some out there have been indicating that reverse comp fees should really start to moderate or even decline because of the shift to streaming with things like Paramount Plus. How do you think about those station affiliate relationships and what their fair cost is of CBS national programming?

Speaker Change: Streaming with things like Paramount plus how do you think about those station affiliate relationships and what their fair cost is of Cvs National programming I think a lot of television station margins are a lot higher than the Cvs networks margins. So I'm just wondering about what you think is a fair way to share those economics, especially as the company is entering into this cost cutting and more <unk>.

Steven Cahall: I think a lot of TV station margins are a lot higher than the CBS network's margins. So, I'm just wondering about what you think is a fair way to share those economics, especially as the companies entering into this cost-cutting and more cash-generative mode that you all talked about. Thank you.

Speaker Change: Cash generative mode that you all talked about thank you.

Naveen Chopra: Yeah, hey Steve, it's Navine, I'll start on the first part and then hand it to George to address the second part. So, in terms of content expense on Paramount Plus, a few things to keep in mind. So, number one, obviously 2024 is going to look sort of different on a year-over-year basis relative to 23, just given that it was a highly strike-impacted year in 23. We're going to have more content in the back half of 24 than we did last year.

Speaker Change: Yeah, Hey, Steve.

Speaker Change: I'll start on the first part and then hand, it to George to address the second part so in terms of content expense on Paramount plus a few things to keep in mind. So number one obviously 'twenty 'twenty four is going to look different on a year over year basis relative to 'twenty three just given the.

Speaker Change: Net.

George: It was a highly strike impacted year in 'twenty three.

George: Gonna have more content in the back half of 'twenty four than we did last year.

Naveen Chopra: Also, remember that there is seasonality in our content expense. So, one of the reasons that Paramount Plus was profitable, excuse me, the D to C segment was profitable in Q2 was because it was a lighter quarter in terms of content in particular, we don't have as much sports expense in the quarter as we do in the back half of the year. And that, frankly, is one of the reasons why the main goal we're focused on, and this relates to the other part of your question, is driving domestic profitability for Paramount Plus in 2025, which is intended to be a full-year goal. And I think that is, obviously, the more important measure of profitability is making sure that the business is profitable, not just in a particular quarter, but on a full-year basis.

George: Also remember that our there is seasonality in our content expense.

George: So one of the reasons that Paramount plus was profitable excuse me. The <unk> segment was profitable in Q2 was because it was a lighter quarter in terms of content.

Speaker Change: In particular, we don't have as much sports expense in the quarter as we do in the back half of the year.

Speaker Change: And that frankly is one of the reasons why the main goal we're focused on and this relates to the other part of your question.

Speaker Change: Is driving domestic profitability for Paramount plus in 2025, which is intended to be a full year goal and I think that is obviously the more.

Speaker Change: Important measure of profitability is making sure that the business is profitable not just in a particular quarter, but on a full year basis.

George Cheeks: George, sure. So, see, we're keenly aware of the changing industries dynamics and the challenges that our affiliates are facing. Now, our role as a network in this partnership is to provide best-in-class content with maximum reach. And this means we've got to continue to invest in producing hit shows, our news programming, and investing in sports rights. Now, in terms of the fair value, the fair value is really determined by the strength of our content, offering.

George: George sure.

Speaker Change: So Steve we're keenly aware of the changing industry dynamics and the challenges that our affiliates are facing now our role as the network and this partnership is to provide best in class content with maximum reach and this means we've got to continue to invest in producing hit shows our news programming and investing in sports right now in terms of the fair value the fair.

Speaker Change: Value is really determined by the strength of our content offering and the good news here is that CBS is delivering on all fronts. I mean, we're number one in prime number one in daytime number one in late night, we have an incredible sports portfolio led by the NFL, but including college football NCAA and golf. So again, our job is to make sure that we're providing best in.

George Cheeks: And the good news here is that CBS is delivering on all fronts. I mean, we're number one in pride, number one in daytime, number one in late night. We have incredible sports portfolio led by the NFL, but including college football, NCAA, and golf. So again, our job is to make sure that we're providing best-in-class content for our affiliates to justify the content speeds that we charge them. Thanks, Steve.

Speaker Change: <unk> content for our affiliates to justify the content fees that we charge them.

Speaker Change: Thanks, Steve Operator, we have time for one last question.

Felicia Norby: Operator, we have time for one last question.

Bryan Kraft: Of course, the last question comes from Bryan Kraft from Deutsche Bank.

Speaker Change: The last question comes from Bryan Kraft from Deutsche Bank. Please go ahead.

Bryan Kraft: Please go ahead. Oh, thank you.

Speaker Change: Thank you.

Bryan Kraft: I had to, if I could, just first, how was the company approaching licensing Paramount's content? The third party is, you know, relative to the prior regime. And related, I know Naveen talked about the outlook for the rest of this year for licensing, and I realized there are a lot of moving pieces with strikes. But the question is whether you think after 2024 licensing will still be a growth driver for the company.

Bryan Kraft: I had two if I could just first how is the company approaching licensing paramount's content to third parties relative to the prior regime and related I know <unk> talked about the outlook for the rest of this year for licensing and I realize there are a lot of moving pieces with the strikes but the question is whether you think after <unk>.

Bryan Kraft: 24 licensing will still be a growth driver for the company.

Brian Robbins: And then the second one is just was wondering if you talked a bit about the importance of sports. Would you be interested in or will you pursue additional sports rights that might be coming up for renewal over the next couple of years that you don't currently have in this interim period before the merger closes? Or is that something that would be revisited kind of post-merger? Thank you. Sure, Bryan. This is Bryan.

Speaker Change: And then the second one is.

Speaker Change: Just was wondering if you talked a bit about the importance of sports would you be interested in or will you pursue additional sports rights that might be coming up for renewal over the next couple of years that you don't currently have in this interim period before the merger closes or is that something that.

Speaker Change: We'd be revisited kind of post merger. Thank you.

Speaker Change: Sure Brian This is Brian I'll take the first part of the question.

Brian Robbins: I'll take the first part of the question. You know, for us, licensing is not either or. It's actually more. It's about driving more revenue, more reach, and more relevance for our content. But first and foremost, I think we're focused on maximizing the first run value of our content on our own and operated platforms and channels, whether that's through advertising, affiliate, or subscription revenues. And then of course, windowing is key, and it always has been key.

Speaker Change: For us licensing is not either or it's actually more it's about driving more revenue more reach and more relevance for our content, but first and foremost I think we are focused on maximizing the first run value of our content on our owned and operated platforms and channels, whether that's <unk>.

Speaker Change: Through advertising affiliate or subscription revenues.

Speaker Change: And then of course windowing is key and it always has been key.

Brian Robbins: And we will still continue to license our content to third party platforms. And fortunately for us, our content is in demand. It's in demand from consumers, and it's in demand from other platforms. And we believe that not only do we drive more revenue by licensing to third party platforms, but it also increases the demand of that content on our own platforms by opening it up to new eyeballs on other people's platforms and then driving back to our own.

Speaker Change: And we will still continue to license our party our content to third party platforms and Fortunately for US our content is in demand it's in demand from consumers and it's in demand from other platforms and we believe that not only do we drive more revenue by.

Speaker Change: Licensing to third party platforms, but it also increases the demand of that content on our own platforms by opening it up to new eyeballs on other People's platforms, and then dropping back to our own. So we will continue to license, we're very focused on creating the greatest opportunity.

Brian Robbins: So we will continue to license. We're very focused on creating the greatest opportunity while continuing to control our IP. And there's always going to be timing dynamics that are reflected in performance, but given the power of our content and IP, long term, licensing is a compelling business for us.

Speaker Change: <unk>, while continuing to control, our IP and Theres always going to be timing dynamics that are reflected in performance, but given the power of our content and IP long term licensing is a compelling business for us.

George Cheeks: And this is George that on this undersports question, Brian. So first of all, I would say we still really, really good about our current sports portfolio. We've got our core marquee franchises, but that being said, we'll always be opportunistic. In fact, we recently closed two soccer deals with EFL and Syria. So we will always be open in the market, but we're going to always take this discipline approach and make sure that our goal is to ensure that we're giving the right sports portfolio for both broadcasts and for some of you. Streaming. Thanks, George.

George: And this is George hit on this on your sports question, Brian. So first of all I would say, we feel really really good about our current sports portfolio. We've got our core Mark Mark key franchises, but that being said, we will always be opportunistic in fact, we recently closed two soccer deals with EFL and Syria. So we will always be open in the market, but we're going to always take.

Speaker Change: This disciplined approach and make sure that our goal is to ensure that we're giving the right portfolio for both broadcast and for St.

Chris Hemsworth: Thanks, George and this is Chris I'm going to close it out and I'll behalf of my fellow co Ceos, we'd like to thank you for joining us for our call today as you can see from our results we're off to a very strong start in the first half of the year.

Chris Mccarthy: And now this is Chris.

Chris Mccarthy: I'm going to close it out. And on behalf of my fellow Co-Sit-Eos, we'd like to thank you for joining us for our call today. As you can see from our results, we're off to a very strong start in the first half of the year, executing well against our strategic plans. We continue to deliver some of the biggest, broadest-to-tv series and blockbuster films with a high hit ratio. And our performance, this quarter, reflects the power of that content and the actions that we've taken to strengthen the company. Now, looking ahead, we're clear-eyed about the additional work that needs to happen, and we are confident we will deliver. We look forward to updating on our progress.

Chris Hemsworth: Executing well against our strategic plan.

Chris Hemsworth: We continue to deliver some of the biggest broadest hit television series and blockbuster films with a high hit ratio.

Chris Hemsworth: And our performance this quarter reflects the power of that content and the actions that we've taken to strengthen the company.

Speaker Change: Now looking ahead, we are clear eyed about the additional work that needs to happen and we are confident we will deliver well.

Speaker Change: We look forward to updating on our progress. Thank you everyone for joining us and have a good evening.

Felicia Norby: Thank you everyone for joining us and have a good evening. Thank you, everyone.

Speaker Change: Thank you everyone. This concludes today's call you may now disconnect your line.

Felicia Norby: This concludes today's call. You may now disconnect your line. Thank you.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Okay.

Chris Hemsworth: Thank you.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Sure.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth: Okay.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Yes.

Chris Hemsworth: Okay.

Chris Hemsworth:

Chris Hemsworth: Oh.

Chris Hemsworth: Okay.

Chris Hemsworth: [music].

Felicia Norby: [inaudible] John Richard Greenfield, John Hodulik, John Hodulik, John Hodulik, John Hodulik, John John Hodulik, John Hodulik, John Hodulik, John Hodulik,[inaudible] John Hodulik, John Hodulik, John Hodulik, John Hodulik[inaudible] Hodulik, Hodulik, Richard Greenfield, John Hodulik, John Hodulik, John Hodulik, John Hodulik Good afternoon, my name is Felicia Norby, the conference operator today.

Chris Hemsworth: [music].

Chris Hemsworth: [music].

Felicia: Good afternoon, My name is Felicia and I'll be the conference operator today at this time I would like to welcome everyone to Paramount Globose Q2, 2024 earnings conference call.

Felicia Norby: At this time, I would like to welcome everyone to Paramount Global's Q2 2024 earnings conference call. At this time, all lines have been muted to prevent any background noise. After the speakers remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by one on the telephone keypad. If you'd like to withdraw your question, please press star followed by two. In order to get to as many questions as possible, we ask that you please limit yourself to one question.

Felicia: At this time all lines have been muted to prevent any background noise after.

Felicia: After the Speakers' remarks, there will be a Q&A session.

Speaker Change: I would like to ask a question. During this time simply press star followed by one on the telephone keypad, if you'd like to withdraw your question. Please press star followed by two.

Felicia: In order to get to as many questions as possible. We ask that you. Please limit yourself to one question.

Jaime Morris: At this time, I would like to turn the call over to Jaime Morris, Paramount Global's EVP Investor Relations. You may now begin your conference call.

Jamie Morris: At this time I would like to turn the call over to Jamie Morris Paramount Global E. VP Investor Relations you May now begin your conference call.

Jaime Morris: Good afternoon, everyone. Thank you for taking the time to join us for our second quarter 2024 earnings call. Joining me for today's discussion are Paramount's co-CEO's Brian Robbins, Chris McCarthy and George Cheek and our CFO, Navin Chopra. Please note that in addition to the earnings release, we have trending schedules containing supplemental information available on our website. Before we start this afternoon, I want to remind you that certain statements laid on this call are forward looking statements that involve risks and uncertainties.

Jamie Morris: Good afternoon, everyone. Thank you for taking the time to join US for our second quarter 2024 earnings call. Joining me for today's discussion are Paramount's co Ceos, Brian Robbins, Chris Mccarthy, and George Cheeks, and our CFO Levine Chopra.

Speaker Change: Please note that in addition to the earnings release, we have trending schedules containing supplemental information available on our website.

Speaker Change: Before we start this afternoon I want to remind you that certain statements made on this call are forward looking statements that involve risks and uncertainties.

Jaime Morris: These risks and uncertainties are discussed in more detail on our filings with the FCC. Some of today's financial remarks will focus on the justice results. Reconciliation of these non-GAP financial measures can be found in our earnings release or in our trending schedules, which contains supplemental information and in each case can be found in the Investor Relations section of our website.

Felicia: These risks and uncertainties are discussed in more detail in our filings with the SEC.

Felicia: Some of today's financial remarks will focus on adjusted results Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information and in each case can be found in the Investor Relations section of our website now I will turn the call over to Brian.

Brian Robbins: Now, I will turn the call over to Brian. Good afternoon, everyone. Thank you for joining our second quarter earnings call. I'm Brian Robbins and I'm here with my fellow CEO, Chris McCarthy and George Cheek. Today, we look forward to updating you on the results of the quarter and the progress we have made on our strategic plan. That includes streamlining the organization, transforming D2C and optimizing our asset mix. We have been aggressively advancing this plan since we laid it out at our annual meeting of stock holders in early June.

Brian Robbins: Good afternoon, everyone. Thank you for joining our second quarter earnings call.

Brian Robbins: Brian Robbins and I'm here with my fellow Ceos, Chris Mccarthy and George Cheeks today, we look forward to updating you on the results of the quarter and the progress we have made on our strategic plan that includes streamlining the organization transforming D to C and optimizing our asset mix.

Felicia: We have been aggressively advancing this plan since we laid out at our annual meeting of stockholders in early June but before we jump in we'd like to spend a few moments on the transaction with Sky Dance media.

Brian Robbins: But before we jump in, we'd like to spend a few moments on the transaction with SkyDance Media. As you know, on July 7th, Paramount Global announced the signing of a definitive merger agreement with SkyDance, which includes a 45-day go-shop period. We expect to deal the close in the first half of next year. In the meantime, the SkyDance and Redbird teams support our strategic plan and we are continuing to operate business as usual. With that, let's get into our second quarter results and share more details of our progress.

Felicia: As you know on July 7th Paramount Global announced the signing of a definitive merger agreement with Sky Dance, which includes a 45 day go shop period, we expect the deal to close in the first half of next year in the meantime, the Sky dance in Redbird teams supporting our strategic plan and we are.

Felicia: <unk> to operate business as usual.

Speaker Change: With that let's get into our second quarter results and share more details of our progress and then intervene will take us through the financials in depth in.

Naveen Chopra: Medinavine will take us through the financials in depth. In the quarter, we saw strong results both in terms of our financials and our content. A few highlights include 43% growth in total company adjusted orbiter, largely driven by improvement in D to C. Paramount Plus increased revenue 46% year over year. Our content continues to show strength across TV, streaming and theatrical. And we renewed and expanded our long-standing partnership with one of our largest affiliates, Charter.

Felicia: In the quarter, we saw strong results both in terms of our financials and our content.

Speaker Change: A few highlights include a 43% growth in total company adjusted OIBDA, largely driven by improvement in D. C.

Speaker Change: Paramount plus increased revenue, 46% year over year.

Speaker Change: Our content continues to show strength across TV streaming and theatrical.

Felicia: And we renewed and expanded our long standing partnership with one of our largest affiliates charter.

Naveen Chopra: As we've said before, we've been very focused on modernizing our relationships with distributors and this innovative multi-year partnership with Charter is a prime example of how we're doing that. The renewal includes the continued charge of our portfolio of linear cable networks and CBS owned and operated broadcast stations. Also around Labor Day, our Paramount Plus essential ad supported here will be available to Charter's linear customers. Together, we're enhancing the value we're delivering for our consumers, providing them even more ways to watch our big broad hits across linear and streaming. And for us, it has the potential to expand reach and engagement, lower our customer acquisition costs and yield much lower turn. And we view this as one potential partnership roadmap for future distributor renewals.

Felicia: As we've said before we've been very focused on modernizing our relationships with distributors and this innovative multi year partnership with charter is a prime example of how we're doing that.

Felicia: Renewal includes the continued carriage of our portfolio of linear cable networks and CBS owned and operated broadcast stations also around labor day are Paramount plus essential AD supported tier will be available to charters linear customers together, we're enhancing the value we're delivering for our.

Felicia: Consumers, providing them, even more ways to watch our big broad hits across linear and streaming and for US. It has the potential to expand reach and engagement lower our customer acquisition costs and yield much lower churn and we view this as one potential partnership roadmap for future.

Brian Robbins: In addition to Charter, just last week, we announced a multi-year agreement with Next Star to renew CBS Television Network Affiliations in 40 markets across the country. So we continue to have good momentum with our partners.

Chris Hemsworth: Tributary renewals. In addition to charter just last week, we announced a multi year agreement with Nexstar to renews CBS television network affiliations in 40 markets across the country. So we continue to have good momentum with our partners now I'd like to turn the call over to Chris to take you through the.

Chris Mccarthy: Now, I'd like to turn the call over to Chris to take you through the upfront and the highlights of our plan. Thank you, Brian. And good afternoon, everyone. We are pleased with our upfront results, particularly in the context of the evolution of the ad market and the scale of new entrance. Linear volume trends were in line with last year and CPMs were up on a blended basis driven by sports and broadcasts which were relatively strong.

Chris Hemsworth: Front and the highlights of our plan.

Chris Hemsworth: Thank you, Brian and good afternoon, everyone. We are pleased with our upfront results, particularly in the context of the evolution of the AD market and the scale of new entrants.

Chris Hemsworth: Linear volume trends were in line with last year, and Cpm's were up on a blended basis, driven by sports and broadcast which were relatively strong.

Chris Mccarthy: The digital marketplace was also healthy. We secured commitments in excess of $1 billion across our streaming portfolio, reflecting both the quality and the scale of our assets. With our mix of pay and free, we offer the most efficient reach across premium video.

Chris Hemsworth: The digital marketplace was also healthy we secured commitments in excess of $1 billion across our streaming portfolio.

Chris Hemsworth: Reflecting both the quality and the scale of our assets.

Chris Hemsworth: With our mix of pay and free we offer the most efficient reach across premium video.

Chris Mccarthy: Now, let's walk through the progress of making against our strategic plan, starting with streamlining the organization.

Chris Hemsworth: Now, let's walk through the progress that we're making against our strategic plan.

Chris Hemsworth: Starting with streamlining the organization.

Chris Mccarthy: We announced in June that we've identified 500 million in annual run rate cost savings across the company. This 500 million dollars is included in the 2 billion of cost efficiencies identified by Skydance.

Felicia: We announced in June that we've identified $500 million in annual run rate cost savings across the company.

Speaker Change: This $500 million is included in the $2 billion of cost efficiencies identified by Sky dance.

Chris Mccarthy: To realize these savings, we are reducing our US-based workforce by approximately 15%, and we are primarily focused on two areas. First, redundant functions within marketing and communications. Second, streamlining our corporate structure, reducing our headcount in finance, legal, technology, and other support functions. These actions will take place in the coming weeks and will largely be completed by the end of the year.

Felicia: To realize these savings we are reducing our U S based workforce by approximately 15% and.

Felicia: And we are primarily focused on two areas.

Felicia: Redundant functions within marketing and communications.

Felicia: Second streamlining our corporate structure, reducing our head count in finance legal technology and other support functions.

Felicia: These actions will take place in the coming weeks and will largely be completed by the end of the year.

Chris Mccarthy: As you can imagine, these are difficult decisions to make. We have incredibly talented people at Paramount and these actions are not a reflection of their contributions. Rather, they are necessary to transform our organization for the future.

Felicia: As you can imagine these are difficult decisions to make.

Felicia: We have incredibly talented people at Paramount and these actions are not a reflection of our contributions.

Felicia: Rather they are necessary to transform our organization for the future.

Chris Mccarthy: Next, transforming streaming. We are pleased with the progress that we've made and the performance of our direct-to-consumer segment. In Q2, year-over-year profit growth was $450 million dollars and totaled nearly $9 million dollars to the past four quarters. For the fourth year in a row, Paramount Plus was leading the industry inside us, driven by our big, broad, hit TV series and Blackbuster films. And Pluto continues to be the most widely-distributed global fat service, delivering 3.7 billion hours for the first half of 2024. That's up 8% year-rear and that marks our highest consumption ever.

Felicia: Next transforming streaming.

Felicia: We are pleased with the progress that we've made and the performance of our direct to consumer segment.

Felicia: In Q2 year over year profit growth was $450 million and totaled nearly $900 million to the past four quarters.

Felicia: For the fourth year in a row Paramount plus is leading the industry in sign ups driven by our big broad hit television series and blockbuster films.

Felicia: And Pluto continues to be the most widely distributed global fast service delivering $3 7 billion hours for the first half of 2024, that's up 8% year over year and that marks our highest consumption ever.

Chris Mccarthy: Now looking ahead, we remain confident that Paramount Plus will reach domestic profitability in 2025. In addition, to further accelerate profitability and to increase our scale and engagement, we are exploring potential strategic partnerships with multiple parties and are in active discussions.

Felicia: Now looking ahead, we remain confident that Paramount plus will reach domestic profitability in 2025.

Felicia: In addition to further accelerate profitability and to increase our scale and engagement, we are exploring potential strategic partnerships with multiple parties and are in active discussions.

Chris Mccarthy: Finally, optimizing our asset mix. We are aggressively evaluating our portfolio with the goal of improving our balance sheet. The set of assets that make a Paramount Global today were built up through the rise of linear. And while we have strong brands and businesses, we must reshape our portfolios to best compete in the future. The assets under consideration are undeniably strong with exciting futures ahead, but will be better served on their own or as a centerpiece of another business.

Felicia: Finally, optimizing our asset mix, we are aggressively evaluating our portfolio with the goal of improving our balance sheet.

Felicia: The set of assets that make a paramount global today were built up through the rise of linear.

Felicia: And while we have strong brands and businesses, we must reshape our portfolio to best compete in the future.

Felicia: Assets under consideration are undeniably strong with exciting futures ahead, but.

Felicia: So it will be better served on their own or is the centerpiece of another business.

Chris Mccarthy: We look forward to updating you on our progress against the strategic plan over the coming quarters.

Felicia: We look forward to updating you on our progress against our strategic plan over the coming quarters.

George Cheeks: And now I'll turn the call for the George to highlight our key content wins in the quarter and talk about what's coming next. Thanks, Chris. Our core mission centers on what we do best, creating big, broad hits. This is our first priority as well as our competitive advantage. Now in Q2, we have a number of key wins.

Felicia: And now I'll turn the call over to George to highlight our key content wins in the quarter and talk about what's coming next.

George: Thanks, Chris.

George: Our core mission centers on what we do best creating big broad hits. This is our first priority as well as our competitive advantage.

George: Now in Q2, we had a number of key wins CBS finished the $23 24 season as the number one broadcast network in total viewers for the 16th consecutive year. We've made it a top 10 shows and the three most watched new broadcast theories with tracker alphabet, and Ncis Sydney on Paramount plus.

George Cheeks: CBS finished the 2324 season as the number one broadcast network in total viewers for the 16th consecutive year. With 8 at the top 10 shows and the three most-watched new broadcast series with Tracker, Elbeth, and NCIS Sydney. On Paramount Plus, our strong slate drove excellent results, including the return of mayor of Kingston, criminal minds, evil, RuPaul's Drag Race, and the Shy. We also launched new shows like the South Park Special, the end of obesity, the Sonic the Hedgehog spin-off series Knuckles, and a gentleman in Moscow from Showtime.

Speaker Change: Our strong slate drove excellent results, including the return of Merit Kingstown criminal minds evil Rupaul drag race and the shy. We also launched new shows like the South Park special at the end of obesity and Sonic the Hedgehog spinoff series Knuckles, and a gentleman in Moscow from Showtime.

George Cheeks: Q2 brought Bob Marley one love, and the UEFA Champions League final to P++ as well. On Comedy Central, the daily show with John Stewart is posting significant performance gains while engagement on Paramount Plus is outperforming last season by over seven times. Over Paramount Pictures, John Krasinski's IF delivered another number one domestic box office launch, and a quiet place day one saw franchise best performance, beating industry expectations, and grossing over $250 million in worldwide box office today, date.

George: Q2 brought Bob Marley, one love and the UEFA Champions League final to P plus as well.

George: On comedy Central the Daily show with Jon Stewart is posting significant performance gains while engagement Paramount pluses outperforming last season by over seven times.

Speaker Change: Over at Paramount Pictures, John Krasinski, if delivered another number one domestic box office watch and a quiet place day, one saw franchise best performance, beating industry expectations and grossing over $250 million in worldwide box office to date.

George Cheeks: Now to keep this momentum going, we plan the most ambitious slate yet for Paramount Plus. This includes new seasons of Taylor Sheridan's hit series Tulsa King in September, Lioness in October, and the new series Landman in November, as well as the series finale of Evil and Seal Team. The showtime slate kicks off with the new series The Agency from George Clooney, and in December, showtime's biggest franchise ever returns with Dexter Original Sin.

Speaker Change: Now to keep this momentum going we plan the most ambitious slate yet for Paramount plus this includes new seasons of Taylor's Sheraton's hit series Tulsa King in September Lyonnesse in October and the New series land Man in November as well as the series finales of evil and seal team.

Speaker Change: The Showtime slate kicks off with the New series the agency from George Clooney and in December Showtime's biggest franchise ever returns with Dexter original sin.

George Cheeks: Also heading to Paramount Plus, our Reese's box office hits, the new CBS Primetime slate, the new NFL season, and our first full season of Big Ten College Football. The next season's Primetime schedule on CBS is one of the strongest I've seen. In addition to 16 returning series, the new shows will include a spin-off of Young Sheldon, the number one comedy on TV, a contemporary reimagining of the classic series Matt Locke, and a new addition to the NCIS universe.

Speaker Change: Also heading to Paramount plus our recent box office hits, the new CBS Primetime slate the new NFL season in our first full season of Big 10 College football.

Speaker Change: Season's primetime schedule on Cvs is one of the strongest Ive seen in addition to 16 returning series. The new shows will include a spinoff of young Sheldon and the number one comedy on television.

Speaker Change: Contemporary re imagining of the classic series Matlock and a new addition to the Ncis universe.

George Cheeks: And coming soon to movie theaters, we're releasing the first animated Transformers film in nearly 40 years, starring voice cast Chris Hemsworth and Scarlett Johansson. That's followed by Smile 2, the sequel to one of the most profitable films in the studio's history. In November, Cyrilie Scott returns to the arena with the highly anticipated Gladiator 2, which just saw its first trailer become one of the most viewed ever for Paramount. Then we'll finish the year with Sonic the Hedgehog 3.

Speaker Change: And coming soon in movie theaters, we're releasing the first animated Transformers film in nearly 40 years, starring voice cast, Chris Hemsworth and Scarlett Johanson.

Speaker Change: That's followed by Smile to the sequel to one of the most profitable films in the studio's history in November So really Scott returned to the arena with the highly anticipated Gladiator too, which just saw its first trailer become one of the most viewed ever for Paramount.

Speaker Change: We'll finish the year with Sonic the Hedgehog III.

George Cheeks: But we really want to underscore our commitment to operating the business with best in class content at the center. We'll continue to deliver millions of fans around the world. We've got the best created in the business and we're incredibly grateful for their contributions.

Speaker Change: But we really want to underscore our commitment to operating the business with best in class content. At this center will continue to deliver for millions of fans around the world. We've got the best created in the business and we're incredibly grateful for their contributions. Thanks.

Naveen Chopra: Thanks so much for joining us today, and with that, I'll turn it over to Naveen. Thank you, George, and good afternoon, everyone. Our Q2 results demonstrate strong execution, continued evolution of our distribution and monetization strategies, and the ongoing power of our creative engines. Financially speaking, this translated to 43 percent growth in adjusted oivida, reflecting significant improvement in our D to C business, which is delivering healthy top-line growth and improved operating margin. Additionally, balance sheet leverage improved by one-third of a turn since the end of Q1.

Speaker Change: Thanks, so much for joining us today and with that I'll turn it over to Nadeem.

Nadeem: Thank you George and good afternoon, everyone. Our Q2 results demonstrated strong execution continued evolution of our distribution and monetization strategies and the ongoing power of our creative engines.

Nadeem: Financially speaking this translated to a 43% growth in adjusted OIBDA, reflecting significant improvement in our D to C business, which is delivering healthy topline growth and improved operating margin.

Speaker Change: Additionally, balance sheet leverage improved by one third of a turn since the end of Q1.

Naveen Chopra: As always, you'll find a comprehensive review of Q2 results in our press release, so today I'm going to focus on a few areas of note. First, advertising. In Q2, direct-to-consumer advertising grew 16 percent, benefiting from increased viewing hours across Paramount Plus and Pluto TV, along with higher CPMs. In TV media, overall domestic advertising trends were negatively impacted by the fact that sports comprise a smaller share of inventory than it has in recent quarters.

Speaker Change: As always you'll find a comprehensive review of Q2 results in our press release, so today I'm going to focus on a few areas of note.

Speaker Change: First advertising.

Speaker Change: In Q2 direct to consumer advertising grew 16% benefiting from increased viewing hours across Paramount plus and Pluto TV along with higher Cps.

Speaker Change: In television media overall domestic advertising trends were negatively impacted by the fact that sports comprised a smaller share of inventory than it has in recent quarters.

Naveen Chopra: This dynamic somewhat massed the fact that year-ever-year growth in non-sports domestic advertising improved relative to Q1. On a total company basis, advertising declined 6 percent in the quarter. Looking ahead, we expect D to C advertising growth in Q3 to be similar to Q2. And in linear, we expect advertising trends in the second half 24 to improve with the return of live sports, new fall programming, and contribution from political specialists. Next, let me turn to affiliate and subscription revenue, which grew 1% in Q2.

Speaker Change: This dynamic somewhat masked the fact that year over year growth in non sports domestic advertising improved relative to Q1.

Speaker Change: On a total company basis advertising declined 6% in the quarter.

Speaker Change: Looking ahead, we expect DTC advertising growth in Q3 to be similar to Q2 and in linear we expect advertising trends in the second half of 'twenty four to improve with the return of live sports New fall programming and contribution from political spend.

Speaker Change: Next let me turn to affiliate and subscription revenue, which grew 1% in Q2.

Naveen Chopra: As a reminder, last year's second quarter included a showtime pay-per-view event that did not take place this year due to our exit from showtime sports at the end of 2023. This comparison reduced the Q2 growth rate by 250 basis points. D to see subscription revenue grew 12% in the quarter, with Paramount Plus subscription revenue up 50% year-over-year. Paramount Plus finished the quarter with 68.4 million subscribers, which is 2.8 million lower than the end of Q1.

Speaker Change: As a reminder, last year's second quarter included a Showtime pay per view event that did not take place this year due to our exit from Showtime sports at the end of 2023. This.

Speaker Change: This comparison reduced Q2 growth rate by 250 basis points.

Speaker Change: <unk> subscription revenue grew 12% in the quarter with Paramount plus subscription revenue up 50% year over year.

Speaker Change: Paramount plus finished the quarter with $68 4 million subscribers, which is $2 8 million lower than the end of Q1.

Naveen Chopra: At two factors impacted subscriber growth this quarter, both of which were built into our expectations for the full year. The biggest factor by far was the planned exit of our art bundle partnership with TVING in South Korea, which contributed a sizeable number of subs, but limited revenue in Oyveda. Second, domestic sub-growth, though still positive, was hindered by elevated churn from the cohort or subscribers that joined for the Super Bowl in Q1.

Speaker Change: Two factors impacted subscriber growth this quarter, both of which were built into our expectations for the full year.

Speaker Change: The biggest factor by far was the planned exit of our hard bundled partnership with teething in South Korea.

Speaker Change: Which contributed a sizable number of subs, but limited revenue and OIBDA.

Speaker Change: Second domestic sub growth, though still positive was hindered by elevated churn from the cohort of subscribers that joined for the Super Bowl in Q1.

Naveen Chopra: We expect Paramount Plus to return to net subscriber growth in the second half of the year, as we benefit from a more consistent cadence of original content, now that we're beyond the impacts of the strike. We also expect normalized international subscriber growth for the remainder of the year. Paramount Plus Global ARPU expanded 26% in the quarter, reflecting the impact of the price increase that took effect in Q3 of 2023. As well as a shift in the mix of our international subscriber base to higher ARPU markets.

Speaker Change: And we expect Paramount plus to return to net subscriber growth in the second half of the year as we benefit from a more consistent cadence of original content now that we're beyond the impacts of the strike.

Speaker Change: We also expect normalized international subscriber growth for the remainder of the year.

Speaker Change: Paramount plus global <unk> expanded 26% in the quarter, reflecting the impact of the price increase that took effect in Q3 of 2023.

Speaker Change: As well as a shift in the mix of our international subscriber base to higher RP markets.

Naveen Chopra: And as we announced in June, a subsequent domestic price increase will take effect later this month. Monthly pricing for new Paramount Plus customers on our ad-supported tier will move to $7.99. Existing customers will be grandfathered at the current $5.99 price. Monthly pricing on our Paramount Plus which show time tier will increase by $1 to $12.99 for both new and existing customers. We don't expect a meaningful financial impact from the new price increase until Q4, given the time required to implement the price changes across our distribution channels, and because the price increase on the ad-supported tier only applies to new customers.

Speaker Change: And as we announced in June a subsequent domestic price increase will take effect later this month.

Speaker Change: <unk> pricing for new Paramount plus customers on our AD supported tier will move to 799 exists.

Speaker Change: Existing customers will be grandfathered at the current $5 99 price.

Speaker Change: Monthly pricing on our Paramount plus with Showtime tier will increase by $1 to $12 99 for both new and existing customers.

Speaker Change: And we don't expect a meaningful financial impact from the new price increase until Q4, given the time required to implement the price changes across our distribution channels and because of the price increase on the AD supported tier only applies to new customers.

Naveen Chopra: In the TV media segment, affiliate revenue declined 5% year by year, largely reflecting ecosystem trends. Recognizing ongoing changes in the pay TV ecosystem, in Q2 we announced the important multi-year distribution agreement with Charter, which seeks to modernize our long-standing relationship. Starting in Q3, Charter will be the first US NVPD to make the ad-supported tier of Paramount Plus available to basic cable subscribers with no incremental cost to the consumer. Accordingly, users who activate a Paramount Plus essential subscription to an NVPD bundle will be counted as Paramount Plus subscribers.

Speaker Change: In the TV media segment affiliate revenue declined 5% year over year, largely reflecting ecosystem trends.

Naveen Chopra: And the revenue from Charter and future NVPD distribution deals that bundle Paramount Plus. We'll be shared between our TV media and D to C segments. We believe this type of bundle is an efficient way to grow Paramount Plus and can yield many of the same benefits we've experienced in the international markets where we've adopted a similar approach. These bundles ensure that Paramount and our distributors are full participants in the transition of viewing from linear to streaming. Looking ahead to Q3, we expect TV media affiliate revenue growth to decelerate modestly relative to Q2, reflecting the dynamics I just mentioned and the impact of exiting showtime sports.

Speaker Change: Recognizing ongoing changes in the pay TV ecosystem in Q2, we announced an important multiyear distribution agreement with charter, which seeks to modernize our long standing relationship.

Speaker Change: Starting in Q3 charter will be the first U S. N V PD to make the AD supported tier of Paramount plus available to basic cable subscribers with no incremental cost to the consumer.

Speaker Change: Accordingly, users, who activate a paramount plus essential subscription through Mvpds bundle will be counted as paramount plus subscribers.

Speaker Change: And the revenue from charter and future Mvpds distribution deals that bundled Paramount plus.

Speaker Change: We will be shared between our TV media and <unk> segments.

Speaker Change: We believe this type of bundle is an efficient way to grow Paramount plus and can yield many of the same benefits we have experienced in the international markets, where we've adopted a similar approach.

Speaker Change: These bundles ensure that Paramount and our distributors are full participants in the transition of viewing from linear to streaming.

Speaker Change: Looking ahead to Q3, we expect TV media affiliate revenue growth to decelerate modestly relative to Q2, reflecting the dynamics I, just mentioned and the impact of exiting Showtime sports.

Naveen Chopra: Next I'll touch on licensing. Our licensing and other revenue declined 35%. As I've noted previously, licensing revenue growth tends to be bumpy due to the timing of deliveries, and that continued to be the case in Q2 as there were fewer deliveries in the period relative to Q2 of 2023. For example, Q2 of last year included delivery of the final season of Jack Ryan. The quarter was also impacted by a lower volume of licensing in the secondary market.

Speaker Change: Next I'll touch on licensing our.

Speaker Change: Our licensing and other revenue declined 35%.

Speaker Change: As I've noted previously licensing revenue growth tends to be bumpy due to the timing of deliveries.

Speaker Change: And that continues to be the case in Q2 as there were fewer deliveries in the period relative to Q2 of 2023 four.

Speaker Change: For example, Q2 of last year included delivery of the final season of Jack Ryan.

Speaker Change: The quarter was also impacted by a lower volume of licensing in the secondary market.

Naveen Chopra: And we expect licensing revenue to return to growth in the second half of the year, particularly with the return of a new fall slate on CBS in Q4, although we do expect a modest decline in licensing revenue for the full year.

Speaker Change: And we expect licensing revenue to return to growth in the second half of the year, particularly with the return of a new fall slate on CBS in Q4.

Speaker Change: Although we do expect a modest decline in licensing revenue for the full year.

Naveen Chopra: In parallel with our efforts to maximize revenue, we're also highly focused on unlocking incremental cost savings. And as you've heard Chris George and Brian describe, we've identified opportunities to streamline the organization that are expected to yield 500 million of annualized cost reductions. Importantly, this 500 million is included in the 2 billion of cost efficiencies identified by Skydance, and we're aligned in moving quickly to realize them. We expect to execute these actions in the coming weeks, such that we can reach the full $500 million run rate expense reduction as we enter 2025. And in connection with these actions, we expect to incur a restructuring charge of approximately three to 400 million in Q3, the cash impact of which will occur over the next several quarters.

Speaker Change: In parallel with our efforts to maximize revenue. We're also highly focused on unlocking incremental cost savings.

Speaker Change: And as you've heard Chris George and Brian described we've identified opportunities to streamline the organization that are expected to yield $500 million of annualized cost reductions.

Speaker Change: Importantly, this 500 million is included in the 2 billion of cost efficiencies identified by Sky dance.

Speaker Change: And we're aligned and moving quickly to realize them.

Speaker Change: We expect to execute these actions in the coming weeks such that we can reach the full $500 million run rate expense reduction as we enter 2025.

Speaker Change: And in connection with these actions, we expect to incur a restructuring charge of approximately $3 million to $400 million in Q3, the cash impact of which will occur over the next several quarters.

Naveen Chopra: The last part of our Q2 results I want to address is the goodwill impairment charge recorded in the quarter. During Q2, we assess the relevant factors that could impact the fair value of our reporting units. Including the estimated total company market value indicated by the Skydance transactions and recent indicators in the linear affiliate marketplace. As a result, we recorded a $6 billion non-cash goodwill impairment charge for our cable networks reporting unit at TV media.

Speaker Change: The last part of our Q2 results I want to address is the goodwill impairment charge recorded in the quarter.

Speaker Change: During Q2, we assessed the relevant factors that could impact the fair value of our reporting units, including the estimated total company market value indicated by the Sky dance transactions.

Speaker Change: And recent indicators and the linear affiliate marketplace.

Speaker Change: As a result, we recorded a $6 billion noncash goodwill impairment charge for our cable network's reporting unit at TV media.

Naveen Chopra: Now before moving on to questions, I'd like to share some additional information regarding our expectations for the remainder of the year. Our D to C segment was possible this quarter. Our first possible quarter since Paramount Plus launched three and a half years ago. And although the segment will generate losses in Q3 and Q4 due to the timing of content expenses, we're on course to achieve Paramount Plus domestic profitability in 2025. Prof. And for the full year 2024, the progress in D to C profitability means we continue to expect significant growth in total company, Oibida.

Speaker Change: Now before moving on to questions I'd like to share some additional information regarding our expectations for the remainder of the year.

Speaker Change: Our <unk> segment was profitable this quarter, our first profitable quarter since Paramount plus launched three and a half years ago.

Speaker Change: And although the segment will generate losses in Q3 and Q4 due to the timing of content expenses. We're on course to achieve Paramount plus domestic profitability in 2025.

Speaker Change: And for the full year of 2024, the progress in D to C. Profitability means we continue to expect significant growth in total company OIBDA.

Naveen Chopra: And free cash flow will grow relative to 2023. We continue to operate in a dynamic environment, but it's clear that our focus on execution is producing results. We're not standing still during this interim period before the transaction closes. We remain focused on achieving our goals for 2024, which means investing in key content assets, finding expensive efficiencies, improving profitability, deepening partnerships, and de-leveraging our balance sheet. We believe this approach will create value for shareholders over the long term.

Speaker Change: And free cash flow will grow relative to 2023.

Speaker Change: We continue to operate in a dynamic environment, but it is clear that our focus on execution is producing results.

Speaker Change: Not standing still during this interim period before the transaction closes.

Speaker Change: We remain focused on achieving our goals for 2024, which means investing in key content assets finding expense efficiencies improving profitability deepening partnerships and deleveraging our balance sheet.

Speaker Change: We believe this approach will create value for shareholders over the long term.

Felicia Norby: With that operator, please open the line for questions. Thank you.

Speaker Change: With that operator, please open the line for questions.

Speaker Change: Okay.

Speaker Change: Thank you. The first question comes from Michael Morris from Guggenheim. Your line is now open. Please go ahead.

Michael Morris: The first question comes from Michael Morris from Guggenheim. Your line is open. Please go ahead. Thank you. Good afternoon. I wanted to follow up first on Bryan's comments about operating the business during the period between now and when the Skydance transaction will close. How are you ensuring that these steps that you're taking on things like strategic partnerships that you reference? How are you making sure that those are aligned with the long term goals after that transaction is completed? Is Skydance involved in these things during the interim period? And then also how do you keep the teams motivated when there's some uncertainty about what the future may hold for the business?

Speaker Change: Yeah.

Michael Morris: Thank you good afternoon I wanted to follow up first on Brian's comments about operating the business during the period between now and when the guidance transaction will close.

Michael Morris: How are you ensuring that these steps that you're taking on things like strategic partnerships that you referenced how are you, making sure that those are aligned with the long term goals. After that transaction is completed is this guidance involved.

Michael Morris: And these things during the interim period and then also how do you how do you keep the team is motivated when there's some uncertainty about what the future may hold for the business. So that's my first question and then maybe for Nevada on the goodwill charge.

Brian Robbins: So that's my first question. And then maybe for Navine, on the Goodwill charge, you noted the recent indicators in the linear affiliate marketplace were part of what triggered that. Can you expand on that at all? What were the recent indicators that it had to do with the charter agreement? And given the court cutting has been going on for quite a while, why was now the time that that was triggered beyond just the transaction as you mentioned?

Speaker Change: You noted that recent indicators in a linear affiliate marketplace.

Speaker Change: We're part of what triggered that can you can you expand on that at all but what were the recent indicators did it have to do with the charter agreement.

Speaker Change: And given the cord cutting has been going on for quite a while now why was why was now the time that that was triggered beyond just the transaction as you mentioned thank you.

Brian Robbins: Thank you. Sure, Mike. This is Brian. I'll jump in first. As I said in the prepared remarks, Skydance is very supportive of our strategic plan. It's business as usual for us. And we continue to green light projects in the normal course of business. Now, in terms of Skydance involvement, it is what you would expect in any M&A transaction. There are very specific limited things that we will consult with them on. But to the second part of your question, we are just aggressively advancing our strategic plan with our teams.

Speaker Change: Sure Mike This is Brian I'll jump in first.

Speaker Change: As I've said in their prepared remarks Sky dance is very supportive of our strategic plan, it's business as usual for us and we continue to Green light project in the normal course of business now in terms of Sky dance involvement. It is what you would expect in any M&A transaction.

Speaker Change: <unk> there are very specific limited things that we will consult with them on.

Brian Robbins: We talked during the prepared remarks about our actions to streamline the organization, our focus on exploring partnerships as we transform Paramount Plus for the future and the ongoing discussions to optimize our asset mix. And we believe our plan will create value for shareholders over the long term.

Speaker Change: But to the second part of your question. We are just aggressively advancing our strategic plan with our teams.

Speaker Change: We've talked during their prepared remarks about our actions to streamline the organization are focused on exploring partnerships as we transform paramount plus for the future and the ongoing discussions to optimize our asset mix and we believe our plan will create value for shareholders over the long term.

Speaker Change: <unk>.

Speaker Change: Okay.

Naveen Chopra: Thanks, Brian. And so, Mike, let me respond to your question on the Goodwill impairment charge. There's really a couple of things going on there. So first, obviously linear declines are part of the analysis here. But the other part of this is that that really drives the magnitude of the Goodwill impairment charge is the value that's implied by the Skydance transaction. Because the way the accounting works on this is we need to reconcile the value of our individual reporting.

Mike Operator: Thanks, Brian and so Mike let me.

Naveen Chopra: Unit with the enterprise value for the entire company that's implied by the transaction. So, it's really the combination of those things. And, you know, what that results in is the, you know, basically $6 billion non-cash goodwill impairment charge that is specific to our cable network reporting unit. Thanks, Mike.

Mike Operator: Responding to your question on the goodwill.

Robert Fishman: Operator, next question, please. The next question comes from Robert Fishman, from Moffit, Nathan, and please go ahead, your line is open.

Mike Operator: Apparent charge, there's really a couple of things going on there. So first obviously linear declines are part of the analysis here, but the other part of this.

Mike Operator: Is that really drives the magnitude of the goodwill impairment charge is the value that's implied by the Sky dance transaction because the way the accounting works on this is we need to reconcile the value of our individual reporting units with the enterprise value for the.

Speaker Change: Entire company, that's implied by the transaction. So it's really the combination of those things.

Speaker Change: And what else.

Speaker Change: That results in is the.

Speaker Change: Basically 6 billion noncash goodwill impairment charge that is specific to our cable network reporting unit.

Speaker Change: Thanks, Mike Operator next question please.

Speaker Change: The next question comes from Robert Fishman from <unk>.

Speaker Change: Please go ahead. Your line is now open.

Robert Fishman: Good afternoon, everyone. Anything more that you all can share on how you're approaching exploring the licensing of Paramount Plus content, maybe just originals or just broadly speaking, or are you evaluating that licensing in the context of the other JV structures that you're talking about? And then on a separate note, just trying to understand any updated thoughts or how you guys are thinking about using premium sports as part of Paramount Plus and whether or not the charter deal or future distribution agreements that include Paramount Plus influence those strategies given the importance that NFL and other content is to the exclusive within the pay TV ecosystem.

Robert Fishman: Hey, good afternoon, everyone.

Robert Fishman: Anything more that you can share on how you're approaching exploring that the licensing of Paramount plus content, maybe just the original or just broadly speaking or are you evaluating that licensing in the context of the other JV structures.

Speaker Change: And then on a separate note.

Speaker Change: Just trying to understand any updated thoughts there or how you guys are thinking about using premium sports.

Speaker Change: As part of Paramount, plus and whether or not the charter deal our future distribution agreements that include Paramount plus influence those strategies, given the importance that NFL and other content as to the exclusive.

Speaker Change: The pay TV ecosystem. Thank you.

Robert Fishman: Thank you. Hey, Robert. It's Chris. I'll take the first half of that. And then I have passed the George to talk about sports piece. First, let me start by saying we're very pleased with the success that we've had to date with Paramount Plus, the mass 68 million global subscribers. And the power of our content, both our originals and our library, is doing the hard work here, striving a lot of that. Those subscribers and driving our business.

Robert Fishman: Hey, Robert It's Chris I'll take the first half for that and then I have a path to George to talk about the sports piece.

Chris Hemsworth: First let me start by saying, we're very pleased with the success that we've had to date with Paramount plus the last six to 8 million global subscribers and the power of our content both our original and our library is doing the hard work here, it's driving a lot of that.

Speaker Change: Those subscribers and driving our business now as we look forward.

Robert Fishman: Now, as we look forward in 2025, we're on path to hit domestic profitability. But we think there's an opportunity to accelerate that, both just in domestic and globally. And so we're looking at a series of opportunities, whether they come in the form of strategic partnerships or joint ventures. And really, the benefit here is to get greater scale. It better improve our content offering, reduce our cost and drive long-term value, and increase profits both in the short term and the long term.

Robert Fishman: In 2025 were on path to hit domestic profitability, but we think theres an opportunity to accelerate that.

Robert Fishman: And domestic and globally and so we're looking at a series of opportunities whether they come in the form of strategic partnerships or joint ventures.

Robert Fishman: Really the benefit here is to get greater scale.

Robert Fishman: Better improve our content offerings reduce our costs and drive long term value and increase profits both in the short term and the long term and we're exploring all of these opportunities.

Robert Fishman: And we're exploring all these opportunities. And we're going to be very opportunistic about that. So that includes a series of partnerships that could potentially involve some licensing things, but will also be licensing content in addition to that.

Robert Fishman: And we're gonna be very opportunistic about that so that includes a series of partnerships that could potentially involve some licensing but will also be licensing content. In addition to that so.

Chris Mccarthy: So let me toss it over to George to talk about sports. Thanks Chris. So on the sports point, so basically, our strategy here and our focus is that broadcast and streaming together, drive an unduplicated audience and really resolve linear and streaming growth. So when we look at our sort of sports portfolio, we're looking at it through both angles because the beauty of this is that we're seeing growth on both sides. For example, last NFL CPS was up 5% year over year. And the streaming audience at Paramount Plus was up more than 50%. So we're seeing growth for our affiliates and we're seeing growth in streaming. Okay.

George: So let me toss it over to George to talk about sports. Thanks, Chris So on the sports point, So basically our strategy here and our focus is that broadcast and streaming together driving on duplicated audience and really resolve linear and streaming growth. So when we look at our sort of sports portfolio. We're looking at it from both angles because the beauty of this.

Ben Swinburn: Operator, next question please. Next question comes from Ben Twinburn from Morgan Stanley.

George: That we're seeing growth on both sides for example, last NFL season <unk>.

Speaker Change: NFL on CBS was up 5% year over year and the streaming audience on Paramount pluses up more than 50%. So we're seeing growth for our affiliates and we are seeing growth in streaming.

Robert Fishman: Okay.

Robert Fishman: Okay.

Speaker Change: Next question please.

Robert Fishman: Next question comes from Ben Swinburne from Morgan Stanley. Please go ahead. Your line is open.

Ben Swinburn: Please go ahead, your line is open. Thank you.

Ben Swinburne: Thank you.

Naveen Chopra: Good afternoon everybody. Naveen, could you tell us a little bit about how you're thinking about free cash flow, second half of the year and kind of where you think leverage might end at your end, because then you can share that with us. And then I think one of the areas that you guys have talked about, kind of reevaluating or evaluating are your international streaming plans. And I know you mentioned the changes in South Korea, but what's the update there?

Ben Swinburne: Afternoon, everybody Levine could you tell us a little bit about how you're thinking about free cash flow second.

Ben Swinburne: Second half of the year and kind of where you think leverage might end at year end to the extent you can share that with US and then I think one of the areas that you guys have talked about kind of reevaluating or evaluating or your international streaming plans and I know you mentioned.

Robert Fishman: Changes in South Korea, but.

Speaker Change: What's what's the update there do you guys see an opportunity to kind of optimize this business outside the United States and maybe improve the profitability or reduce the losses. There just would be interested in an update on that front as well. Thank you.

Naveen Chopra: Do you guys see an opportunity to kind of optimize this business outside the United States? And maybe improve the profitability or reduce the losses there just would be interested in an update on that from as well. Thank you. Yeah, so Ben, I'll take the first part of your question on cash flow and then I'll turn it over to Chris to comment on our thoughts on international streaming. I think that the cash flow answer is actually pretty straightforward.

Speaker Change: Yes, so Ben I'll take the first part of your question on cash flow and then I'll turn it over to Chris to comment on.

Chris Hemsworth: Our thoughts on international streaming I think the cash flow answer is actually pretty straightforward.

Naveen Chopra: Yeah, we said at the beginning of the year that our plan was to deliver growth in free cash flow in 24 alongside significant growth in Obeda, just in Obeda. And I continue to see the year playing out that well. So excuse me, playing out that way. So no real change for our expectations. Chris, thanks. I mean, hey Ben, listen, you know, today we have a global footprint with Paramount Plus and Pluto.

Speaker Change: We said at the beginning of the year that our plan was to deliver.

Chris Hemsworth: Growth in free cash flow in 'twenty, four alongside significant growth in OIBDA adjusted OIBDA.

Robert Fishman: And I continue to see the year, playing out that well so excuse me playing out that way so no real change to our expectations.

Robert Fishman: Hey, Ben listen today, we have a global footprint with Paramount plus.

Naveen Chopra: And moving forward, we continue, we expect to have or we'll plan to have, excuse me, a global footprint. Now how that footprint looks may change. We're going to be very opportunistic about exploring all of our options here. You know, the overwhelming majority of the economics are going to be driven out of the US market as they are today in the in the content space. And so we want to be take a thoughtful approach about how we look at each market internationally.

Robert Fishman: <unk> and moving forward. We continue we expect to have or plan to have excuse me a global footprint now how that footprint looks may change, we're going to be very opportunistic about exploring all of our options here.

Robert Fishman: The overwhelming majority of the economics are going to be driven out of the U S market as they are today in the <unk> and.

Robert Fishman: In the content space.

Robert Fishman: So we want to be take a thoughtful approach about how we look at each market internationally now that could come in the form of strategic partnerships with maybe platforms. We already have great tremendous amount of reach and our platform.

Naveen Chopra: Now that can come in the form of strategic partnerships with maybe platforms who already have great tremendous amount of reach and a platform. In which case, we'll be reducing our cost by not having to have our own platform or they could come in the form of a joint venture with one or more as five players. In which case, we could get greater scale, increase long-term value and drive greater profits. So we have lots of interest from many different partners in this area and we're exploring all of that and we look forward updating you as we progress. Thanks, Ben.

Chris Mccarthy: Operator, next question, please.

Robert Fishman: Which case, we will be reducing our costs by not having to have our own platform or are they could come in the form of a joint venture with one or more <unk> players in which case, we could get greater scale increase long term value and drive greater profits. So we have lots of interest from many different partners in this area and we're exploring all of that and we look forward to updating you.

Robert Fishman: As we progress.

Ben Swinburne: Thanks, Ben Operator next question please.

Rich Greenfield: Next question comes from Rich Greenfield from Light Shed Partners.

Ben Swinburne: The next question comes from Rich Greenfield from Nightshirt bottleneck. Please go ahead.

Rich Greenfield: Please go ahead. Hi, thanks for taking the questions. I got a couple.

Rich Greenfield: Hi, Thanks for taking the questions I got a couple first just from a very high level I think.

Rich Greenfield: First just from a very high level. I think you've all talked about the 500 million being inclusive of the two billion from Skydance. Skydance is a pretty small company in the scheme of the media world.

Rich Greenfield: You've all talked about the $500 million being inclusive of the $2 billion from Sky and Sky Dance is a pretty small company in the scheme of the media World.

Steven Cahall: Can you help us understand what of the two billion couldn't you accomplish without Skydance meaning could the 500 million be more like a billion and a half on your own, just trying to understand the difference between those two cost-cutting numbers. And then on the charter agreement that you reference, you're going to obviously now be giving Paramount Plus to, you know, I think about nine to 10 million. Charters, video subscribers, do you actually shift the allocation meaning if I think about how you account for this between your various divisions.

Speaker Change: Could you help us understand what are the $2 billion Couldnt, you accomplished without sky dance, meaning because the 500 million be more like a 1 billion and a half on your own just trying to understand the difference between those two cost cutting numbers.

Speaker Change: And then on the charter agreement that you.

Speaker Change: You referenced.

Speaker Change:

Speaker Change: You're going to obviously now be giving Paramount plus two I think about $9 million to $10 million.

Speaker Change: Charter's video subscribers.

Speaker Change: Do you actually shift the allocation, meaning if if I think about how you account for this between your various divisions is there now a reduction and how much affiliate revenue is going to the linear networks with a commensurate allocation of dollars to Paramount plus I'm just trying to understand as you turn this on to those.

Steven Cahall: Is there now a reduction in how much affiliate revenue is going to the linear networks with a commensurate allocation of dollars to Paramount Plus? I'm just trying to understand as you turn this on to those subscribers.

Steven Cahall: And then just a housekeeping point, I think you mentioned is it only charter sub that activate that you get that that are counted or does every subscriber get Paramount Plus and is treated as a subscriber on Paramount's books, in the questions.

Speaker Change: Drivers and then just on the.

Speaker Change: Housekeeping point I think you mentioned is it only charter square sub that activate that you get that are counted or does every subscriber get paramount plus and is treated as a subscriber on paramount's books. Thanks, so much for taking the questions.

Steven Cahall: Yeah, hi, Richard, Steven. I'll try to touch on all of those. So starting with your question on cost savings, as you pointed out, we're moving forward on 500 million of cost savings. But I think it's important to understand that that's sort of step one. We are also working on a variety of other cost reduction plans that are part of our long term plan. Those are significant. They're material. They won't all happen necessarily at the same point in time.

Speaker Change: Yes, Hi, Richard Devine I'll try to touch on all of those so starting with your question on cost savings as you pointed out.

Steven Cahall: And they go beyond head count. You know, we've made most of the 500 million savings that you'll see in a near term as head count related. But we do think that there are opportunities to significantly reduce cost in other areas as well. And, you know, those plans, I think, have helped inform a number of the ideas that comprise the $2 billion that Skydance has referenced. With respect to your question on the charter deal, sort of in reverse order, the way that this works is, yes, subscribers who activate that benefit, if you will, meaning they associate their charter account with a set of P plus credentials, those are subs that we will count as Paramount Plus subscribers.

Speaker Change: We're moving forward on $500 million of cost savings, but I think it's important to understand that that's sort of step. One. We are also working on a variety of other cost reduction plans.

Robert Fishman: That are part of our long term plan.

Robert Fishman: Those.

Robert Fishman: Our significant they're material they won't all happen necessarily at the same point in time and they go beyond head count.

Robert Fishman: We made up most of the $500 million savings that youll see in the near term is head count related but we do think that there are opportunities to significantly reduce costs and.

Robert Fishman: Other areas as well.

Robert Fishman: And you know those plans I think have helped inform a number of the ideas that comprised the $2 billion that's guidance has referenced.

Steven Cahall: And if someone does not activate them, they don't count as a sub. And when they do activate, then we start to allocate a certain amount of the fees that we receive from charter to P Plus. What you'll see in our externally reported financials as a result of that is that the revenue from deals like charter, where we're providing Paramount Plus credentials in a bundle will be split or be shared between the TV media segment and the D to C segment. Thanks, Rich.

Speaker Change: With respect to your question on the charter deal.

Speaker Change: Sort of in reverse order the way that this works is yes subscribers to activate that.

Robert Fishman: That benefit if you will meaning they.

Speaker Change: Associate their charter account with a set of P. Plus credentials those are subs that we will count as Paramount plus subscribers and if someone does not activate them. They don't count as a sub and when they do activate then we start to allocate a certain amount of the fees that we received from charter to <unk>.

Felicia Norby: Operator, next question.

Robert Fishman: Plus what you'll see in our externally reported financials as a result of that is that the revenue from deals like charter, where we're providing paramount plus credentials bundle will be split or be shared between the TV media segment and the DTC segment.

Speaker Change: Thanks, Rich operator next question.

John Hardelick: The next question comes from John Hardelick from UBS. Please go ahead.

Speaker Change: The next question comes from John Hodulik from UBS. Please go ahead. Your line is open.

John Hardelick: Your line is open. Great. Thanks.

John Hodulik: Great. Thanks, just a follow up to Richard's question just.

Naveen Chopra: Just to follow up the Rich's question. Anything you can tell us about, and maybe it doesn't matter anymore because it's all blended together, but the linear pricing you got on the charter side, on the charter deal. And then I guess from a D to C standpoint, the subscribers have to activate for you guys to get paid. But number one, are you guys going to sort of market the service or what can you do to sort of drive penetration within those charter sum base?

Speaker Change: Anything you can tell us about and maybe it doesn't matter anymore, because it's all blended together, but just the linear pricing you got on the on the charter side on the charter deal and then.

Naveen Chopra: And then do they, is there an engagement or sort of consumption issue as well? Is it once they activate once then you sort of get paid going forward? Just any color? I'm just trying to get a sense of what the overall economic to that deal are. Thanks. Yeah, sure, John. Let me try to clarify that a little bit. I think it may be helpful to remember that the way that we structure our deals with distributors, and I'm not going to get into any specific deal, is with a focus on total company economics.

Speaker Change: I guess from a DTC standpoint, the subscribers have to act.

Speaker Change: Activate for you guys to get to get paid but number one are you guys going to sort of market to service or or what can you do to sort of drive penetration within those charters sub base and then do they is there a engagement or sort of consumption.

Speaker Change: Issue as well once they act to activate once then you sort of get paid going forward.

Speaker Change: Just any color I'm, just trying to get a sense of really what.

Speaker Change: With the overall economics of that deal are thanks.

Speaker Change: Yeah sure John debating it let me try to clarify that a little bit.

Speaker Change: It may be helpful to remember that the way that we structure, our deals with distributors and I'm not going to get into any specific deal.

Speaker Change: With a focus on total company economics.

Naveen Chopra: That used to be largely about cable and broadcast and premium linear networks. Now it includes all of those things plus obviously paramount plus. House. And so, independent of how those things may be delineated for contractual purposes, for our financial reporting, we allocate those seeds between, as I said earlier, our TV media segment and our D to C segment. So, the revenue that we receive is not contingent on whether somebody activates or not. It's all part of the overall economics of our range with the distributor. Thanks, John.

Speaker Change: That used to be largely about cable and broadcast and premium linear networks. Now. It includes all of those things plus obviously paramount plus.

Speaker Change: And so independent of how those things may be delineated for contractual purposes for our financial reporting we allocate those fees between as I said earlier, our TV media segment <unk> segment.

Speaker Change: So the revenue that we receive is not contingent on whether somebody activates or not it's all part of the overall economics of our arrangement with the distributor.

John: Thanks, John Operator next question.

Naveen Chopra: Operator, next question. The next question comes from Steven Cahall, from Wells Fargo. Please go ahead. Thanks. So, Naveen, just a few more on Paramount Plus profitability. Can you talk about the value of content that you expect on Paramount Plus this year, from an amortization perspective, especially as you move into the back half the year when it's a little heavier. And with the guidance you have for next year, how much do you think that content value is going to grow in 25?

Speaker Change: The next question comes from Steven Cahall from Wells Fargo. Please go ahead.

Steven Cahall: Thanks <unk>.

Steven Cahall: Just a few more on Paramount plus profitability can you talk about the value of content that you expect on Paramount plus this year from an amortization perspective, especially as you move into the back half of the year, when it's a little heavier and with the guidance yet for next year. How much do you think the content value is going to grow in 'twenty five and.

Naveen Chopra: And just a housekeeping one on it, you said you'll be profitable for Paramount Plus in 2025. Is that different from 425 as in a positive number for the full year? And then also, George, CBS affiliate, some out there have been indicating that reverse comp fees should really start to moderate or even decline because of the shift to streaming with things like Paramount Plus. How do you think about those station affiliate relationships and what their fair cost is of CBS national programming?

Speaker Change: A housekeeping one on it you said you'll be profitable for Paramount plus in 2025 is that different from 425, and then a positive number for the full year and then also George CBS affiliates. Some out there have been indicating that reverse comp fees should really start to moderate or even decline because of the shift to streaming with things like Paramount.

Speaker Change: How do you think about those station affiliate relationships and what their fair cost as of Cvs National programming I think a lot of television station margins are a lot higher than the Cvs networks margins. So I'm just wondering about what you think is a fair way to share those economics, especially as the company is entering into this cost cutting and more cash generative mode.

Naveen Chopra: I think a lot of TV station margins are a lot higher than the CBS networks margins. So, I'm just wondering about what you think is a fair way to share those economics, especially as the companies entering into this cost-cutting and more cash-generative mode that you all talked about. Thank you. Yeah, hey Steve, it's Naveen, I'll start on the first part and then hand it to George to address the second part. So, in terms of content expense on Paramount Plus, a few things to keep in mind.

Speaker Change: You all talked about thank you.

Speaker Change: Yeah, Hey, Steve.

Speaker Change: I'll start on the first part and then hand, it to George to address the second part so in terms of content expense on Paramount plus a few things to keep in mind. So number one obviously 'twenty 'twenty four is going to look different on a year over year basis relative to 'twenty three just given the.

Naveen Chopra: So, number one, obviously, 2024 is going to look sort of different on a year-over-year basis relative to 23, just given that it was a highly strike-impacted year in 23. We're going to have more content in the back half of 24 than we did last year. Also, remember that there is seasonality in our content expense. So, one of the reasons that Paramount Plus was profitable, excuse me, the D to C segment was profitable in Q2 was because it was a lighter quarter in terms of content in particular.

Speaker Change: Net.

George: It was a highly strike impacted year in 'twenty three.

George: We're going to have more content in the back half of 'twenty four than we did last year.

George: Also remember that there is seasonality in our content expense.

George: So one of the reasons that Paramount plus was profitable excuse me. The <unk> segment was profitable in Q2 was because it was a lighter quarter in terms of content.

Naveen Chopra: We don't have as much sports expense in the quarter as we do in the back half of the year. And that, frankly, is one of the reasons why the main goal we're focused on, and this relates to the other part of your question, is driving domestic profitability for Paramount Plus in 2025, which is intended to be a full-year goal. And I think that is obviously the more important measure of profitability is making sure that the business is profitable, not just in a particular quarter, but on a full-year basis.

George: In particular, we don't have as much sports expense in the quarter as we do in the back half of the year.

George: And that frankly is one of the reasons why the main goal we're focused on and this relates to the other part of your question.

George: Is driving domestic profitability for Paramount plus in 2025, which is intended to be a full year goal and I think that is obviously the more.

George: Important measure of profitability is making sure that the business is profitable not just in a particular quarter, but on a full year basis.

Naveen Chopra: George, sure. So, see, we're keenly aware of the changing industry dynamics and the challenges that our affiliates are facing. Now, our role as a network in this partnership is to provide best-in-class content with maximum reach. In this means, we've got to continue to invest in producing hit shows, our news programming, and investing in sports rights. Now, in terms of the fair value, the fair value is really determined by the strength of our content, offering.

George: George sure.

Speaker Change: So Steve we're keenly aware of the changing industry dynamics and the challenges that our affiliates are facing now our role as the network and this partnership is to provide best in class content with maximum reach and this means we've got to continue to invest in producing hit shows our news programming and investing in sports right now in terms of the fair value the fair.

Speaker Change: Value is really determined by the strength of our content offering and the good news here is that CBS is delivering on all fronts. I mean, we're number one in prime number one in daytime number one in late night, we have an incredible sports portfolio led by the NFL, but including college football NCWA and golf. So again, our job is to make sure that we're providing best in.

Naveen Chopra: And the good news here is that CBS is delivering on all fronts. I mean, we're number one in pride, number one in daytime, number one in late night. We have incredible sports portfolio led by the NFL, but including college football, NCAA and golf. So again, our job is to make sure that we're providing best-in-class content for our affiliates to justify the content speeds that we charge. Thanks, Steve.

Felicia Norby: Operator, we have time for one last question.

Bryan Kraft: Of course, the last question comes from Brian Kraft from Deutsche Bank.

Bryan Kraft: Please go ahead. Oh, thank you.

Speaker Change: Class content for our affiliates to justify the content fees that we charge them.

Speaker Change: Thanks, Steve.

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

Speaker Change: Gosh. The last question comes from Bryan Kraft from Deutsche Bank. Please go ahead.

Bryan Kraft: Thank you.

Bryan Kraft: I had to, if I could just first, how was the company approaching licensing Paramount's content, the third parties, you know, relative to the prior regime. And related, I know Naveen talked about the outlook for the rest of this year for licensing. And I realized there are a lot of moving pieces with strikes, but the question is whether you think after 2024 licensing will still be a growth driver for the company.

Bryan Kraft: I had two if I could just first how is the company approaching licensing paramount's content to third parties relative to the prior regime and related I know <unk> talked about the outlook for the rest of this year for licensing and I realize there are a lot of moving pieces with the strikes but the question is whether you think after 2008.

Speaker Change: 24 licensing will still be a growth driver for the company.

Brian Robbins: And then the second one is just was wondering if you talked a bit about the importance of sports. Would you be interested in or will you pursue additional sports rights that might be coming up for renewal over the next couple of years so you don't currently have in this interim period before the merger closes? Or is that something that would be revisited kind of post-merger?

Speaker Change: And then the second one is.

Speaker Change: Just was wondering if you talked a bit about the importance of sports.

Speaker Change: Would you be interested in or will you pursue additional sports rights that might be coming up for renewal over the next couple of years that you don't currently have in this interim period before the merger closes or is that something that would be revisited kind of post merger. Thank you.

Brian Robbins: Thank you. Sure, Brian. This is Brian. I'll take the first part of the question. You know, for us licensing is not either or. It's actually more. It's about driving more revenue, more reach, and more relevance for our content. But first and foremost, I think we're focused on maximizing the first-round value of our content on our owned and operated platforms and channels, whether that's through advertising, affiliate, or subscription revenues. And then of course, windowing is key, and it always has been key.

Speaker Change: Sure Brian This is Brian I'll take the first part of the question.

Speaker Change: For us licensing is not either or it's actually more it's about driving more revenue more reach and more relevance for our content, but first and foremost I think we are focused on maximizing the first run value of our content on our owned and operated platforms and channels whether that's.

Speaker Change: Through advertising affiliate or subscription revenues.

Speaker Change: And then of course windowing is key and it always has been key.

Brian Robbins: And we will still continue to license our content to third-party platforms. And fortunately for us, our content is in demand. It's in demand from consumers and it's in demand from other platforms. And we believe that not only do we drive more revenue by licensing to third-party platforms, but it also increases the demand of that content on our own platforms by opening it up to new eyeballs on other people's platforms and then driving back to our own.

Bryan Kraft: And we will still continue to license our party.

Bryan Kraft: Our content to third party platforms and unfortunately for us all.

Speaker Change: Our content is in demand it's in demand from consumers and it's in demand from other platforms and we believe that not only do we drive more revenue by licensing to third party platforms, but it also increases the demand of that content on our own platforms by opening.

Speaker Change: It up to new eyeballs on other People's platforms, and then dropping back to our own. So we will continue to license, we're very focused on creating the greatest opportunity while continuing to control, our IP and theres always going to be timing dynamics that are reflected in performance, but given.

Brian Robbins: So, we will continue to license. We're very focused on creating the greatest opportunity while continuing to control our IP. And there's always going to be timing dynamics that are reflected in performance, but given the power of our content and IP, long-term licensing is a compelling business for us.

Speaker Change: The power of our content and IP long term licensing is a compelling business for us.

George Cheeks: And this is George and on this undersports question, Brian. So, first of all, I would say we still really, really good about our current sports portfolio. We've got our core marquee franchises, but that being said, we'll always be opportunistic. In fact, we recently closed two soccer deals with EFL and Syria. So we will always be open in the market, but we're going to always take this discipline approach and make sure that our goal is to ensure that we're giving the right sports portfolio for both broadcast and for- Streaming.

George: And this is George then on this on your sports question, Brian. So first of all I would say, we feel really really good about our current sports portfolio. We've got our core mark marquee franchises, but that being said, we'll always be opportunistic in fact, we recently closed two soccer deals with EFL and Syria. So we will always be open in the market, but we're going to always take.

George: This disciplined approach and make sure that our goal is to ensure that we're giving the right sport portfolio for both broadcast and for St.

Chris Mccarthy: Thanks George, and now this is Chris.

Chris Hemsworth: Thanks, George and now this is Chris I'm going to close it out and on behalf of my fellow co Ceos wed like to thank you for joining us for our call today as you can see from our results we're off to a very strong start in the first half of the year.

Chris Mccarthy: I'm going to close it out and I'll be half my fellow co-searchos we'd like to thank you for joining us for our call today. As you can see from our results, we're off to a very strong start in the first half of the year, executing well against our strategic plan. We continue to deliver some of the biggest, broadest-to-tv series and blockbuster films with a high-hit ratio. And our performance, this quarter, reflects the power of that content and the actions that we've taken to strengthen the company. Now looking ahead, we're clear-eyed about the additional work that needs to happen and we are confident we will deliver. We look forward to updating on our progress.

George: Executing well against our strategic plan.

George: We continue to deliver some of the biggest broadest hit television series and blockbuster films with a high hit ratio.

George: And our performance this quarter reflects the power of that content and the actions that we've taken to strengthen the company.

George: Now looking ahead, we are clear eyed about the additional work that needs to happen and we are confident we will deliver well.

George: We look forward to updating on our progress. Thank you everyone for joining us and have a good evening.

Felicia Norby: Thank you everyone for joining us and have a good evening. Thank you everyone.

Speaker Change: Thank you everyone. This concludes today's call you may now disconnect your line.

Felicia Norby: This concludes today's call. You may now disconnect your line.