Q4 2024 Fox Corp Earnings Call

August 6, 2024

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation fourth quarter fiscal year 2024 earnings conference call.

Operator: 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize that functionality for the question-and-answer queue will be available at that time. If you should require assistance during the call, please press star, then zero.

Speaker Change: At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize that functionality for the question-and-answer queue will be given at that time.

Speaker Change: If you should require assistance during the call, please press star then zero. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Operator: As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Gabrielle Brown: Thank you, operator. Good morning, and welcome to our fiscal 2024 fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, Chief Operating Officer, and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results.

Gabrielle Brown: Thank you, operator. Good morning and welcome to our fiscal 2024 fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, Chief Operating Officer, and Steve Tomsic, our Chief Financial Officer.

Gabrielle Brown: First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results.

Speaker Change: These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filing.

Gabrielle Brown: These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filing. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA, as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filing, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Speaker Change: Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA as we refer to it on this call.

Speaker Change: Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website.

Lachlan Murdoch: Thank you, Gabby, and thank you all for joining us this morning to celebrate our fiscal fourth-quarter results. Fiscal 2024 was another successful year for Fox, in which we delivered nearly $14 billion of revenue and $2.88 billion of EBITDA. The year that just ended and the momentum from the start of our new fiscal year underscore that the soundness of our strategy, the consistency of our delivery, and the strength of our financial position have never been more clear.

Speaker Change: And with that, I'm pleased to turn the call over to Lachlan. Thank you, Gabby, and thank you all for joining us this morning to celebrate our fiscal fourth quarter results.

Lachlan: Fiscal 2024 was another successful year for Fox, in which we delivered nearly $14 billion of revenue and $2.88 billion of EBITDA.

Lachlan: The year that just ended and the momentum from the start of our new fiscal year underscore that the soundness of our strategy, the consistency of our delivery, and the strength of our financial position has never been more clear.

Lachlan Murdoch: Looking back, there were clear achievements across our businesses in fiscal 24, including delivering strong total company affiliate revenue growth each quarter from our ongoing renewals, cementing Tubi's position as the most-watched free TV and movie streaming service in the United States, and generating reinvigorated ratings and share growth at Fox News. The power of our brands and our ability to deliver engaged audiences at scale across our platforms remains remarkably strong. Total time spent viewing all Fox brands increased in Fiscal 24, despite the absence of the Super Bowl and FIFA Men's World Cup.

Lachlan: Looking back, there were clear achievements across our businesses in fiscal 24, including delivering strong total company affiliate revenue growth each quarter from our ongoing renewals.

Lachlan: Cementing Tubi's position as the most watched free TV and movie streaming service in the United States and generating reinvigorated ratings and share growth at Fox News.

Lachlan: The power of our brands and our ability to deliver engaged audiences at scale across our platforms remains remarkably strong.

Lachlan: Total time spent viewing all Fox brands increased in Fiscal 24, despite the absence of the Super Bowl and FIFA Men's World Cup.

Lachlan Murdoch: TV viewing time, as measured by Nielsen, grew 57% in fiscal 24, with absolute growth in minutes of viewing, easily surpassing the growth of leading subscription video-on-demand services. Fox Sports' Big News Saturday was the number one-ranked window in college football for a third straight year, while America's Game of the Week hit an eight-year viewership high this fiscal year. And Fox News was again the most watched network in cable news in fiscal 24, with 52% more minutes of viewing than its closest competitor.

Lachlan: Tubi viewing time, as measured by Nielsen, grew 57% in fiscal 24, with absolute growth in minutes viewing easily surpassing the growth of leaving subscription video-on-demand services.

Lachlan: Fox Sports' Big News Saturday was the number one-ranked window in college football for a third straight year, while America's Game of the Week hit an eight-year viewership high this fiscal year.

Lachlan: And Fox News was, again, the most watched network in cable news in fiscal 24, with 52% more minutes of viewing than its closest competitor.

Lachlan Murdoch: Our foundation for this coming fiscal year is solid, as we carry the momentum from Fiscal 24 into another year of major events, particularly for our news and sports businesses. The recent news cycle has been nothing short of extraordinary.

Lachlan: Our foundation for this coming fiscal year is solid, as we carry the momentum from fiscal 24 into another year of major events, particularly for our news and sports businesses.

Lachlan: The recent news cycle has been nothing short of extraordinary.

Lachlan Murdoch: And when news breaks, people turn to the news brand they trust. The strength of our news coverage is unmatched, and Fox News remains the clear first choice for viewers during the most pivotal moments. The fourth quarter saw audience levels return to growth at the Fox News Channel, driven by our political coverage and strong primetime lineup. Fox News exited the fiscal year as the most watched network in all of cable, in total day and in prime Time, and gained share amongst cable news networks in both prime and total day versus last year.

Lachlan: And when news breaks, people turn to the news brand they trust.

Lachlan Murdoch: Furthermore, the ratings story at Fox News continued to improve into this fiscal year when, in July, total viewers grew nearly 80% and the 25-54 demo grew 120% over last year. Additionally, Fox News had its highest-rated weekend ever in primetime in July, with over 5.7 million viewers tuning in to its extended coverage of the Trump rally in Butler, Pennsylvania. In fact, Fox News had its highest share of the cable news audience across the board in prime Time since August 2015, and The Fox News Channel rated number one across all linear television in July for total viewers in weekday prime, beating the nearest broadcast competitor by nearly 10%. These positive trends bode well for Fox News as we continue through this extraordinary news cycle. But news is not our only business with great momentum.

Speaker Change: The strength of our news coverage is unmatched, and Fox News remains the clear first choice for viewers during the most pivotal moments.

Speaker Change: The fourth quarter saw audience levels return to growth at the Fox News Channel, driven by our political coverage and strong primetime lineup.

Speaker Change: Fox News exited the fiscal year as the most watched network in all of cable, in total day and in prime time, and gained share amongst cable news networks in both prime and total day versus last year.

Speaker Change: Furthermore, the ratings story at Fox News continued to improve into this fiscal year when, in July , total viewers grew nearly 80% and the 25-54 demo grew 120% over last year.

Speaker Change: Fox News had its highest-rated weekend ever in primetime in July , with over 5.7 million viewers tuning in to its extended coverage of the Trump rally in Butler, Pennsylvania.

Speaker Change: In fact, Fox News had its highest share of the cable news audience across the board in prime time since August 2015.

Speaker Change: And the Fox News Channel rated number one across all linear television in July , for total viewers in weekday prime, beating the nearest broadcast competitor by nearly 10%.

Speaker Change: These positive trends bode well for news as we continue through this extraordinary news cycle.

Speaker Change: But news is not our only business with great momentum.

Lachlan Murdoch: Tubi is also enjoying impressive viewership metrics and revenue growth. It has improved upon its status as the most watched free TV and movie streaming service in the U.S., finishing the fiscal year at a record high of 2% of total TV viewing. Tube U saw continued momentum in viewership during the fourth quarter, reaching an all-time high of 81 million monthly active users and growing total view time by 17 percent, driven by an expansive library that offers something for every consumer. Not only is the Tubi Library the largest in the U.S., but it also has unique content that audiences can only find on Tubi.

Speaker Change: 2B is also enjoying impressive viewership metrics and revenue growth.

Speaker Change: To be improved upon its status as the most watched free TV and movie streaming service in the U.S., finishing the fiscal year at a record high of 2% of total TV viewing.

Speaker Change: Tubi saw continued momentum in viewership during the fourth quarter, reaching an all-time high of 81 million monthly active users and growing total view time by 17 percent, driven by an expansive library that offers something for every consumer.

Speaker Change: Not only is the Tubi Library the largest in the U.S., but it also has unique content that audiences can only find on Tubi.

Lachlan Murdoch: Notwithstanding a complex digital advertising marketplace and a tough year-on-year comparison, this viewership drove 7% revenue growth during the quarter. Importantly, however, we ended the month of June with revenue growth in the teens. And that pace has continued into this quarter with steady pricing despite increased inventory in the overall market. Over at Fox Sports, the fourth quarter was very active, thanks to Fox's Summer of Soccer, which exceeded all expectations and set viewership records.

Speaker Change: Notwithstanding a complex digital advertising marketplace and a tough year-on-year comparison, this viewership drove 7% revenue growth during the quarter. Importantly, however, we ended the month of June with revenue growth in the teens.

Speaker Change: And that pace has continued into this quarter with steady pricing, despite increased inventory in the overall market.

Lachlan Murdoch: The UEFA European Championship averaged 1.7 million viewers across the Fox broadcast network and FS1, a 34% gain over the 2021 tournament. Cobra America averaged 1.4 million viewers, a three-time increase over the 2021 tournament. The two finals also broke records and now rank as the most watched soccer matches ever on Fox, other than World Cup matches. But it's not just soccer that our audiences are watching. The regular season of Major League Baseball is also trending positively, and our special broadcaster, the Rickwood game and the MLB All-Star game, each performed well above expectations.

Speaker Change: Over at Fox Sports, the fourth quarter was very active, thanks to Fox's Summer of Soccer, which exceeded all expectations and set viewership records.

Speaker Change: The UEFA European Championship averaged 1.7 million viewers across the Fox broadcast network and FS1, a 34% gain over the 2021 tournament.

Speaker Change: and Cobra America averaged 1.4 million viewers over a three-time increase above the 2021 tournament.

Speaker Change: The two finals also broke records and now rank as the most watched soccer matches ever on Fox, other than World Cup matches.

Speaker Change: But it's not just soccer that our audiences are watching this summer. The regular season of Major League Baseball is also trending positively, and our special broadcast of the Rickwood game and the Major League Baseball All-Star game each performed well above expectations.

Lachlan Murdoch: And in just a few short weeks, we welcome back the NFL and college football on Fox. Our 2024 NFL schedule will start strong. Fox's first four America's Game of the Week windows include three Dallas Cowboys games and a rematch of last year's Chiefs versus Niners Super Bowl. And, of course, our schedule ends strong too, culminating in Super Bowl 59 this February on Fox. Also debuting this fall will be a new lineup from Fox Entertainment, with the return of popular shows like Hell's Kitchen and The Masked Singer and the debut of new dramas like High Surf and Murder in a Small Town, which many of you saw a preview of at our successful Upfront presentation in May.

Speaker Change: And, in just a few short weeks, we welcome back the NFL and college football on Fox.

Speaker Change: Our 2024 NFL schedule will start strong. Fox's first four America's Game of the Week windows includes three Dallas Cowboys games and a rematch of last year's Chiefs versus Niners Super Bowl.

Speaker Change: And, of course, our schedule ends strong, too, culminating in Super Bowl LII this February on Fox.

Speaker Change: Also debuting this fall will be a new lineup from Fox Entertainment, with the return of popular shows like Hell's Kitchen and The Masked Singer, and the debut of new dramas like High Surf and Murder in a Small Town, which many of you saw a preview of at our successful Upfront presentation in May.

Lachlan Murdoch: Speaking of the upfront, we see a much healthier market than the nuanced one I referred to six months ago. As evidence, our upfront commitments were strong. Our focused portfolio of market-leading properties in sports, news, entertainment, and streaming delivered year-over-year growth in both linear and digital advertising commitments, as well as growth in the overall portfolio pricing in this year's upfront. Notably, we saw double-digit volume growth and stable pricing at Tubi, which is testament to its incredible momentum in the streaming market.

Speaker Change: Speaking of the upfront, we see a much healthier market than the nuanced one I referred to six months ago.

Speaker Change: Our focused portfolio of market-leading properties in sports, news, entertainment, and streaming delivered year-over-year growth in both linear and digital advertising commitments, as well as growth in overall portfolio pricing in this year's upfront.

Speaker Change: Notably, we saw double-digit volume growth and stable pricing at Tubi, which is testament to its incredible momentum in the streaming marketplace.

Lachlan Murdoch: At the local level, we are expecting a very robust election advertising cycle that will be weighted to our second quarter. If anything, as polling tightens, the election map may be extended to more of the markets in which we operate. As we enter a very exciting fiscal 2025, we will continue to focus on execution with events such as the U.S. election cycle at our local stations and on Fox News, Super Bowl 59 on Fox, the renewal of one quarter of our distribution revenue, and the launch of the venue sports streaming service in the fall. Our strong, differentiated position, coupled with the strength of our balance sheet, underpin our confidence in continuing to deliver meaningful shareholder returns. And with that, I'll hand it over to Steve. Thanks.

Speaker Change: At the local level, we are expecting a very robust election advertising cycle that will be weighted to our second quarter.

Speaker Change: If anything, as the polling tightens, the election map may be extended to more of the markets in which we operate.

Speaker Change: As we enter a very exciting fiscal 2025, we will continue to focus on execution.

Speaker Change: with events such as the U.S. election cycle at our local stations and Fox News, Super Bowl 59 on Fox, the renewal of one quarter of our distribution revenue, and the launch of the venue sports streaming service in the fall.

Speaker Change: Our strong differentiated position, coupled with the strength of our balance sheet, underpin our confidence on continuing to deliver meaningful shareholder returns.

Steven Tomsic: Thanks, Lachlan, and good morning, everyone. Fox once again delivered financially in fiscal 2024 with total company revenues of almost $14 billion and adjusted EBITDA of $2.88 billion. We successfully completed approximately one-third of our affiliate renewals this year, with the financial benefits of these renewals driving 4% growth in total company affiliate fee revenues, led by 9% growth in the television segment. Our fiscal 2024 results compare against a prior year of marquee events, including the record-breaking Super Bowl 57, the FIFA Men's World Cup, and the midterm election cycle.

Steve: And with that, I'll hand over to Steve. Thanks, Lachlan, and good morning, everyone. Fox once again delivered financially in fiscal 2024, with total company revenues of almost $14 billion and adjusted EBITDA of $2.88 billion.

Steve: We successfully completed approximately one-third of our affiliate renewals this year, with the financial benefits of these renewals driving 4% growth in total company affiliate fee revenues, led by 9% growth at the television segment.

Steven Tomsic: As anticipated, the comparison to these cyclical events contributed to an 18% decline in total company advertising revenues. Total company other revenues were down 4% year-over-year, with higher sports sub-licensing revenues more than offset by lower content revenues impacted by the SAG and WGA labor disputes. Total company expenses decreased 5%, largely due to the absence of costs associated with the Super Bowl and Men's World Cup in the prior year.

Speaker Change: Our fiscal 2024 results compare against the prior year of marquee events.

Steven Tomsic: However, this was partially offset by the first-year step-up under our new NFL Rights Agreement, also contributing to this overall decrease in expenses, will lower entertainment programming costs due to the strike. Net income attributable to stockholders was $1.5 billion, or $3.13 per share, up versus the $1.24 billion or $2.33 per share reported in fiscal 2023. Restructuring, impairment, and other corporate matters were impacted by charges associated with the Fox News media litigation last year.

Speaker Change: Total company other revenues were down 4% year-over-year, with higher sports sub-licensing revenues more than offset by lower content revenues impacted by the SAG and WGA labour disputes.

Speaker Change: Total company expenses decreased 5% largely due to the absence of costs associated with the Super Bowl and Men's World Cup in the prior year. However, this was partially offset by the first-year step-up under our new NFL Rights Agreement.

Speaker Change: Also contributing to this overall decrease in expenses, will lower entertainment programming costs due to the strikes.

Speaker Change: Net income attributable to stockholders was $1.5 billion or $3.13 per share, up versus the $1.24 billion or $2.33 per share reported in fiscal 2023.

Speaker Change: Restructuring, impairment and other corporate matters was impacted by charges associated with the Fox News media litigation last year.

Speaker Change: and non-operating other net was impacted by the change in the fair value of the company's investment in Flutter, partially offset by the book gain on USFL assets contributed to the United Football League joint venture.

Speaker Change: Excluding non-core items, 4-year adjusted net income was $1.65 billion and adjusted EPS was $3.43 a share.

Steven Tomsic: Operating Other Net was impacted by the change in the fair value of the company's investment in Flutter, partially offset by the book gain on UFFL assets contributed to the United Football League joint venture. Excluding non-core items, four-year adjusted net income was $1.65 billion, and adjusted EPS was $3.43 a share. Turning to our fiscal fourth quarter, Fox delivered total revenues of $3.09 billion, up 2% from the prior year quarter, and quarterly adjusted EBITDA of $773 million, up 5% from the prior year quarter.

Speaker Change: Turning to our fiscal fourth quarter. Fox delivered total revenues of $3.09 billion, up 2% from the prior year quarter, and quarterly adjusted EBITDA of $773 million, up 5% from the prior year quarter.

Steven Tomsic: Total company affiliate fee revenues grew 5% over the prior year, with growth at both our television and cable segments, supported by our recent cycle of affiliate renewals. However, total company advertising revenues were flat, as the revenue generated from our summer of soccer and growth at TUVI was offset by lower ratings and pricing at the Fox Network. Total company other revenues were down 11%, primarily due to a lower volume of third-party content sales in the current year quarter. However, growth in total company expenses was held to 1%.

Speaker Change: Total company affiliate fee revenues grew 5% over the prior year, with growth at both our television and cable segments, supported by our recent cycle of affiliate renewals.

Speaker Change: Total company advertising revenues were flat, as the revenue generated from our summer of soccer and growth at Juvia was offset by lower ratings and pricing at the Fox Network.

Speaker Change: Total company other revenues were down 11% primarily due to a lower volume of third party content sales in the current year quarter.

Steven Tomsic: Here, costs associated with the broadcasts of UAC Euros and Copper America, along with digital investments at Tubi, were partially offset by the deconsolidation of the USFL and lower programming and production costs at Fox Entertainment from the higher mix of unscripted versus scripted content. Net income attributable to stockholders of $319 million, or $0.68 per share, was down versus the $375 million, or $0.74 per share, reported in the prior year quarter. However, excluding non-core items, adjusted net income in the quarter increased to $423 million, while adjusted EPS grew 2% to $0.90 a share.

Speaker Change: Growth in total company expenses was held to 1%.

Speaker Change: Here, costs associated with the broadcasts of the UAC Euros and Copper America, along with digital investments at Tubi, were partially offset by the deconsolidation of the USFL and lower programming and production costs at Fox Entertainment from the higher mix of unscripted versus scripted content.

Speaker Change: Net income attributable to stockholders of $319 million or $0.68 per share was down versus the $375 million or $0.74 per share reported in the prior year quarter.

Speaker Change: Excluding non-core items, adjusted net income in the quarter increased to $423 million, while adjusted EPS grew 2% to $0.90 a share.

Steven Tomsic: Now turning to the quarterly results of our main operating segment, Cable Network's fourth-quarter revenue grew 2% year over year. Cable affiliate fee revenues increased 2% with growth in pricing from our affiliate renewals outpacing the impact from industry subscriber declines running in the mid-8% range. Cable Advertising revenues grew 3% at the, At the National Sports Networks, advertising benefited from the broadcasts of CONMEBOL COPPER AMERICA and the UEFA European Championship. At Fox News, ad revenues benefited from higher pricing, improved ratings, and slightly lower preemption, had leather revenues were essentially unchanged from the prior year quarter. Cable expenses were 11% lower than the prior year quarter, primarily due to the deconsolidation of the USFL and lower programming costs of Fox News, partially offset by the UEFA Euros and Copper America.

Speaker Change: Now turning to the quarterly results of our main operating segments.

Speaker Change: At Cable Network's fourth quarter revenue grew 2% year-over-year. Cable affiliate fee revenues increased 2%, with growth in pricing from our affiliate renewals outpacing the impact from industry subscriber declines running in the mid-8% range.

Speaker Change: Cable Advertising Revenues grew 3% at the net.

Speaker Change: At the National Sports Networks, advertising benefited from the broadcasts of Condor Bowl Copper America and the UEFA European Championship.

Speaker Change: At Fox News, ad revenues benefited from higher pricing, improved ratings, and slightly lower preemptions.

Speaker Change: Other revenues were essentially unchanged from the prior year quarter.

Speaker Change: Cable expenses were 11% lower than the prior year quarter, primarily due to the deconsolidation of the USFL and lower programming costs of Fox News, partially offset by the UEFA Euros and Copper America.

Steven Tomsic: All end quarterly adjusted EBITDA at the cable segment grew 20% over the prior year quarter to reach $703 million. Turning to our television segment, where we delivered 2% growth in quarterly revenue. This was led by 9% growth in television affiliate fee revenues as price increases across Fox-owned and operated and Fox-affiliated stations continued to outpace the impact from subscriber decline. However, television advertising revenues fell 1% as the broadcasts of the UEFA Euros and Copa America and growth at Tubi were offset by lower ratings and pricing at the Fox network.

Speaker Change: All end quarterly adjusted EBITDA at the cable segment grew 20% over the prior year quarter to reach $703 million.

Speaker Change: Turning to our television segment, where we deliver 2% growth in quarterly revenues.

Speaker Change: This was led by 9% growth in television affiliate fee revenues, as price increases across Fox owned and operated and Fox affiliated stations continued to outpace the impact from subscriber declines.

Speaker Change: Television advertising revenues fell 1% as the broadcasts of the UEFA Euros and Copper America and growth at Tubi were offset by lower ratings and pricing at the Fox Network.

Steven Tomsic: Television and other revenues fell 19% in the quarter, primarily due to a lower volume of third-party content sales. Expenses at the television segment grew 8% over the prior-year quarter, primarily due to costs associated with UEFA Euros and Copper America and digital investment at Tubi, partially offset by lower programming and production costs at Fox Entertainment. Taking the lease factors into account, quarterly adjusted EBITDA at the television segment declined 35% against the prior year quarter to $148 million.

Speaker Change: Television and other revenues fell 19% in the quarter, primarily a result of a lower volume of third-party content sales.

Speaker Change: Expenses of the television segment grew 8% over the prior year quarter, primarily due to costs associated with UEFA Euros and Copper America, and digital investment at Tubi, partially offset by lower programming and production costs at Fox Entertainment.

Speaker Change: Taking all these factors into account, quarterly adjusted EBITDA at the television segment declined 35% against the prior year quarter to $148 million.

Steven Tomsic: During the full year, we generated free cash flow, which we define as net cash provided by operating activities less capex of $1.5 billion. Before we get to capital allocation and the balance sheet, it is worth noting some key items for this coming fiscal year. Most notably, we return to another major event cycle in fiscal 2025, led by Super Bowl 59, which we expect will drive significant growth in both advertising revenues and free cash flow.

Speaker Change: During the full year we generated free cash flow, which we define as net cash provided by operating activities less capex, of $1.5 billion.

Speaker Change: Before we get to capital allocation and balance sheet, it is worth noting some key items for this coming fiscal year.

Speaker Change: Most notably, we return to another major event cycle in fiscal 2025, led by Super Bowl 59, which we expect will drive significant growth in both advertising revenues and free cash flow.

Steven Tomsic: However, this is the first Super Bowl under our new NFL contract and accordingly will have elevated rights amortization. We continue to expect strong political advertising in the first half of the fiscal year from the election cycle, which will particularly benefit our stations group.

Speaker Change: However, this is the first Super Bowl under our new NFL contract, and accordingly will have elevated rights amortization.

Speaker Change: We continue to expect strong political advertising in the first half of the fiscal year from the election cycle, which will particularly benefit our stations group.

Steven Tomsic: From an affiliate revenue perspective, we have a relatively light year of renewals with approximately one quarter of our total company distribution revenues up for renewal, which is more weighted to our cable segment. We expect to continue to invest in our digital-led growth initiative. Here, Tuvi will continue to be the focus of investment spend, with the collective digital portfolio expected to deliver improved EBITDA relative to 2024. We also look forward to the expected launch of Venue Sports this fall.

Speaker Change: From an affiliate revenue perspective, we have a relatively light year of renewals with approximately one quarter of our total company distribution revenues up for renewal, which are more weighted to our cable segment.

Speaker Change: We expect to continue to invest in our digital-led growth initiatives.

Speaker Change: Here, 2B will continue to be the focus of investment spend, with the collective digital portfolio expected to deliver improved EBITDA relative to 2024.

Speaker Change: We also look forward to the expected launch of VENU Sports this fall. As a reminder, our share of ownership results from VENU will be recorded below EBITDA in equity earnings.

Gabrielle Brown: As a reminder, our share of ownership results from Venue will be recorded below EVA data in Equity Earnings. Returning to capital allocation, over the course of the fiscal year, we returned $1 billion of capital through the repurchase of 40 million Class A shares and a further $250 million in dividend payments. Underlining our continued commitment to shareholder returns, today we announced an increase in our semi-annual dividend to $0.27 per share. Since the payment of this dividend, and taking into account share repurchase activity since year-end, we will have cumulatively returned over $7.25 billion of capital to our shareholders since the spin-off in 2019.

Speaker Change: Returning to capital allocation.

Speaker Change: Over the course of the fiscal year, we returned $1 billion of capital through the repurchase of 40 million Class A shares and a further $250 million in dividend payments.

Speaker Change: Underlining our continued commitment to shareholder returns, today we announced an increase in our semi-annual dividend to $0.27 per share.

Speaker Change: With the payment of this dividend, and taking into account share repurchase activity since year-end, we will have cumulatively returned over $7.25 billion of capital to our shareholders since the spin in 2019.

Gabrielle Brown: This includes $5.65 billion of share repurchases, representing over 27% of our total shares outstanding since the launch of the buyback program in November 2019. This is all supported by the strength of our balance sheet, where we ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt. And with that, I'll turn the call back to Gabby to get started with Q&A.

Speaker Change: This includes $5.65 billion of share repurchases, representing over 27% of our total shares outstanding since the launch of the buyback program in November 2019.

Speaker Change: This is all supported by the strength of our balance sheet, where we ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt.

Gabrielle Brown: Great, thank you, Steve. And now, we would be happy to take questions from the investment community.

Speaker Change: And with that, I'll turn the call back to Gabby to get started with Q&A. Great. Thank you, Steve. And now we will be happy to take questions from the investment community.

Operator: Ladies and gentlemen, I'd like to emphasize the functionality of the question and answer queue. If you wish to ask a question, please press 1 and 0 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by once again pressing 1 and 0. If you're using a speakerphone, please pick up the handset before pressing the numbers.

Operator: It has been requested that you limit yourself to one question. Once again, if you have a question, please press 1 and 0 at this time. And one moment, please, for your first question. Your first question comes from the line of Ben Swinburne from Morgan Stanley. Please go ahead.

Speaker Change: Ladies and gentlemen, I'd like to emphasize the functionality for the question and answer queue.

Gabby: If you wish to ask a question, please press 1 and 0 on your touchtone phone.

Gabby: You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by once again pressing 1 then 0. If you are using a speakerphone, please pick up the handset before pressing the numbers.

Gabby: It has been requested that you limit yourself to one question. Once again, if you have a question, please press 1 and 0 at this time. And one moment, please, for your first question.

Ben Swinburne: Thank you. Good morning.

Speaker Change: Your first question comes from the line of Ben Swinburne from Morgan Stanley . Please go ahead.

Lachlan Murdoch: I want to ask about Venue, which is launching quite soon. You guys have announced, or they have announced, the price point. I guess, Lachlan, how are you thinking about this product now that it's about to launch and the pricing's out? You've given us some sense of the sort of longer term. subscriber potential, but I didn't know if you wanted to revisit that or just share your thoughts on how you think that product fits and who the audience is.

Ben Swinburne: Thank you. Good morning. I want to ask about Venue, which is launching quite soon. You guys have announced or they've announced the price point.

Ben Swinburne: I guess, Lachlan, how are you thinking about this product now that, you know, it's about to launch and pricing's out? You've given us some sense of sort of longer-term subscriber potential, but I didn't know if you wanted to revisit that or just share your thoughts on how you think that product fits and who the audience is.

Lachlan Murdoch: And Steve, is there anything we should be thinking about in terms of the impact of the financials in fiscal 25 from venue, you know, sort of across the income statement or cash flow statement that we should be keeping our eyes on? I know you guys are obviously equity partners and also will benefit from any revenue generation from the product. Thanks so much.

Ben Swinburne: Steve, is there anything we should be thinking about in terms of the impact to the financials in fiscal 25 from venue, sort of across the income statement or cash flow statement that we should be keeping our eyes on? I know you guys are obviously equity partners and also will benefit from any revenue generation from the product. Thanks so much.

Lachlan Murdoch: Hey, Ben, thank you very much for the question, and good morning. Obviously, a number of milestones have been achieved in the development of Venu. As we've gone through the beta, and as you lead towards the launch later this month, this new beta is released practically every day, and the product looks both excellent, really good, but also quite revolutionary in the way Americans are going to view sport. So we remain incredibly excited about it. Venu announced their pricing of $42.99 as an initial launch price.

Ben Swinburne: Hey, Ben, thank you very much for the question and good morning. Obviously, a number of milestones have been achieved in the development of Venue as we've gone through the beta and, you know, as you lead towards the...

Speaker Change: The launch later this month.

Speaker Change: This new beta releases practically every day and the product is looking, you know,

Speaker Change: Both excellent, really good, but also quite revolutionary in the way Americans are going to view sport. So, we remain...

Lachlan Murdoch: We think that really hits the right mark and the target for where we want to be as a business, but also as a consumer proposition. And there's really no update, really, on our expectations of 5 million subscribers over five years. That's what's in the business plan, and that's what we're aiming to achieve. Obviously, it's very important that those subscribers are focused on cord cutters and cord nevers. We feel that, and all the partners in Venu feel very strongly that we can target our marketing and our subscriber acquisition to sports fans that are not currently in the cable television bundle. That's important to us, and that really is what will lead us to subscriber levels in the mid-single-digit millions.

Speaker Change: and incredibly excited about it.

Speaker Change: You know, the venue announced their pricing of $42.99 as an initial launch price. We think that's the...

Ben Swinburne: It really hits the right mark and the target for where we want to be as a business, but also as a consumer.

Ben Swinburne: Proposition. And there's no update really on our expectations of five million subscribers over five years.

Ben Swinburne: That's what's in the business plan and that's what we're aiming to achieve. Obviously, it's very important that those subscribers are focused.

Ben Swinburne: on Cord Cutters and Cord Nevers. We feel that, and all the partners in venue, feel very strongly that we can target our marketing and our subscriber acquisition to sports fans that are not currently in the cable television bundle. That's important to us, and that really is what leads us to subscriber level in the mid-single-digit millions.

Steven Tomsic: Thanks. Steve?

Speaker Change: Steve? Yeah, thanks Ben. So in terms of impact and financial statements, obviously we had a two-sided relationship with venue sports, so

Steven Tomsic: Yeah, thanks Ben. So in terms of impact and financial statements, obviously, we've got a two-sided relationship with venue sports, so... As a shareholder, the business is going to take some time to get the cash flow break even, so from a shareholder perspective, you'll see that investment come through. We'll take the deficit through equity earnings in the P&L and investment through cash flow. But obviously, we're a key supplier to the JV, being a content supplier for our sports networks, and so the benefit of that you'll see come through in our affiliate fee revenues, both in cable and TV.

Steve: As a shareholder, the business is going to take some time to get the cash flow break even.

Steven Tomsic: So it's a touch early, I think, with 100% lockdown in terms of the launch date, to give you any sort of guide on the quantum in terms of fiscal 25 impact. But as I said a couple of earnings calls ago, on a net-net basis, it should be accretive to us on a pretty quick basis.

Operator: Operator, next question please.

Operator: Your next question comes from the line of John Hodulik from UBS. Please go ahead. All right. Thanks and good morning.

John Hodulik: Hey, thanks and good morning. Maybe a couple quick questions on the ad market. First of all, on the TV side, you guys mentioned lower pricing that you were seeing. Could you delineate what you're seeing on the sports side versus entertainment? And on cable, just any outlook you can provide on the cable ad outlook, just given the strong ratings we've seen thus far in 3Q. And lastly, on politics, as we sort of head into this. You know what I would call an unprecedented sort of political situation. I mean, just any way to sort of size what you expect from political spending versus other or previous presidential elections would be great.

Lachlan Murdoch: Thanks. Thanks very much, John.

Steve: Alright, thanks, very much John so.

Speaker Change: Uh huh.

Lachlan Murdoch: Overall, our pricing is very strong, and we had both pricing and volume increases coming out of our upfront. We've now closed our upfront, 99% of the business is in-house, so the upfront process is now completed and completed, I'm happy to report, very successfully.

Speaker Change: Overall, our pricing is very strong and we had both pricing and volume increases coming out of our upfront. We've now closed our upfront.

Speaker Change: 99% of the business is in house so.

Speaker Change: The upfront.

Lachlan Murdoch: Going into the upfront, to be totally honest, there were ins and outs, there were some headwinds that you could see, and we were... still remain cautiously optimistic about what could be achieved, but we actually came through the upfront above our expectations, and again, I'm pretty pleased with the momentum that we saw in our businesses. Of course, this was led by sports, both with the sports inventory that we have and the marquee events that we have, culminating in Super Bowl 59 this year. Sport was incredibly strong, not just in football but also in Major League Baseball, so we're very pleased with that.

Lachlan Murdoch: In cable, Fox News also saw volume increases in the upfront, most pleasingly, I think, and obviously, that's coupled with really remarkable ratings increases. But most importantly, and we've talked about this a number of times on previous calls, the strength in the direct response marketplace in the high teens in terms of pricing is a great return to growth in pricing for direct response and really bodes well for that line of our business.

Lachlan Murdoch: When we then look at politics, The Georgia runoff, right? So if you look at the apples-to-apples of political cycles, we would expect a record political cycle this year. And in particular, as the race heats up, we're seeing more money flow into the marketplace. And a new marketplace is emerging, as I mentioned in my prepared comments. As the race tightens. For instance, Atlanta and Phoenix, where there's a significant amount of money now being placed only in the last couple of weeks. So we do, you know, expect a very robust political cycle. And we think it will be a record political cycle ex the George.

Speaker Change: Comments as they.

Speaker Change: Our ratio tightens for instance of Atlanta and Phoenix.

Speaker Change: There's a significant amount of money now being placed only in the last couple of weeks. So we do.

Speaker Change: I expect a very robust political cycle, and and we think a record political cycle Exxon the Georgia.

Speaker Change: Run off four years ago.

Speaker Change: Next question please operator.

Operator: Your next question comes from the line of Robert Fishman from Moffett Nathanson. Please go ahead. Hi, good morning, everyone. Can you share your latest expectations?

Speaker Change: Your next question comes from the line of Robert Fishman from Moffett Nathanson. Please go ahead.

Operator: Hi, good morning, everyone. Can you share your latest expectations to keep growing affiliate fees in fiscal 25 after the pricing increases roll through from your recent renewals? And how much more room is there to drive retrans pricing given the importance of Fox's exclusive sports content in the pay TV ecosystem? And then, separately, if I can, what should investors think about the level of content spend across the company? Maybe they can just help us with the right balance between sports and scripted entertainment, unscripted, and even reality.

Robert Fishman: Thanks so much.

Robert Fishman: Hi, Good morning, everyone can you share your latest expectations to keep growing affiliate fees in fiscal 'twenty five after the pricing increases roll through from your recent renewals and how much more room is there to drive retrans pricing given the importance of Fox as exclusive sports content in the pay TV ecosystem.

Speaker Change: And then just separately if I can how should investors think about the level of content spend across the company, maybe just help us with the right balance between sports and scripted entertainment unscripted at and even <unk>. Thanks, so much.

Speaker Change: Thank you very much Robert.

Speaker Change: So I think.

Lachlan Murdoch: On growing affiliate fees, we expect to continue to modestly grow our affiliate fees in light of the obviously declining volume of subscribers. I think we've called out in the past quarter, the last quarter, that sort of reduction in subscribers is around 8%, mid-8%. And as that continues, we'll be able to grow our prices above that, but it's going to be modestly above that number. And that's really based on the focus of our core brands, the fact that we're not carrying the baggage of any entertainment cable channels or legacy channels, which we have to use the leverage of Fox News or Fox Sports to support. We can be entirely focused on driving appropriate value for our core cable brands and also for our television stations.

Speaker Change: On growing affiliate fees.

Steven Tomsic: Yeah, and Robert, in terms of content span, if I just go through the sort of the key verticals we have, it's sports. We've got regular amortization increases, obviously, the NFL is the single largest piece of that. In fiscal 25, that's partially offset by the fact that in October we move away from WWE and replace that with college sports rights. To be, I think you should expect us to continue to grow content.

Steven Tomsic: Some of that is active in terms of licensed content and originals, and some of that is passive because so much of the... The revenues come from revenue-shared deals, and so that just grows with the amount of usership and advertising growth.

Steven Tomsic: News is pretty modest growth. A lot of that has to do with talent and breaking news coverage, and that's sort of very predictable. And then the final one I think you were alluding to was entertainment and the shift from scripted to unscripted. With that, it's probably worth noting that Fiscal 24 obviously was very impacted by the strikes and so you had a very significant shift from scripted to unscripted programming. And that is, well, that's partially thematic. In Fiscal 24, that trend was particularly amplified, and it basically saved us north of $100 million in the year in terms of entertainment programming costs.

Speaker Change: So I, just north of a $100 million.

Speaker Change: Entertainment programming costs don't expect that to continue to happen and in fact, it will swing back a little bit the other way as we sort of rebalanced the portfolio. The slight next year with a little bit more scripted fare I think though when we look at entertainment. We look at it from the perspective of how do we get our cost per hour down when I compare.

Steven Tomsic: Don't expect that to continue to happen, in fact it will swing back a little bit the other way as we sort of rebalance the portfolio, the slate next year with a little bit more scripted fare. I think though when we look at entertainment, we look at it from the perspective of how do we get our cost per hour down and when I compare what I think fiscal 25 will look like versus fiscal 23, that cost per hour is probably down 10 to 15% but we obviously want to have a balanced broadcast network that serves our sort of cross-promotional needs, serves our capacity to monetize from an advertising perspective and serves our capacity to monetize our content in downstream windows and as ownerships of the content so we're going to be balanced.

Speaker Change: Well I think fiscal 'twenty five we'll look that look like versus fiscal 'twenty three that cost per hour is probably down 10% to 15%, but we obviously want to have a balanced broadcast network.

Speaker Change: That sort of cross promotional needs says that capacity monetize from an advertising perspective and setback capacity to seven.

Speaker Change: Monetize our content in downstream windows and design ships through the content. So we're going to be balanced about it.

Operator: Operator, we can go to the next question.

Speaker Change: Operator, we can go to the next question.

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

Speaker Change: Question comes from the line of Jessica Reif Ehrlich from Bank of America. Please go ahead.

Jessica Reif-Ehrlich: Thanks. I have one follow-up and one question. So in the follow-up... Sounds like you had a great start. I'm wondering what the first year of your new ad sales team is doing that's anything different in their code. Obviously, it's a great result, but you also have great advantages. And then secondly, one of the... Key Assets of the Company is your balance sheet strength. Just wondering, you know, since you're already in live news and sports. There are a couple of areas of the traditional media industry that are still growing. Where do you see your next opportunity? Thanks very much, Jessica. Good morning.

Speaker Change: One follow up on one question on the follow up.

Speaker Change: It sounds like you had a great upfront.

Speaker Change: This is the first year of your new AD sales team is there anything that.

Speaker Change: They're doing that like anything different in your approach.

Speaker Change: You've obviously had great results, but you also have like great events.

Speaker Change: And then secondly, one of the.

Speaker Change: Key assets of the company as your balance sheet strength.

Speaker Change: And.

Lachlan Murdoch: Thanks very much, Jessica. Good morning.

Lachlan Murdoch: First, on the ad sales team, I think...

Lachlan Murdoch: First, on the ad sales team, thank you for calling them out. They've done a tremendous job, and we're very happy with their performance. Jeff Collins has stepped into the role very well and is leading the team effectively and obviously monetizing all of the impressions that we were able to generate. So we're very pleased with that.

Lachlan Murdoch: Going into the upfront, we're structured, I think, a little bit differently than some other media companies. I'm not aware of the structure of the advertising and sales organizations across the entire industry, but we retain expertise across the verticals. So we have a very focused sports team, we have a very focused news team, entertainment, and importantly, more and more, our digital team, which is obviously a great part of Tubi. So while we have expertise in those teams, in the upfront, we're able to sell across the entire portfolio, our OneFox portfolio, and that proved to be very successful and very effective in this upfront.

Lachlan Murdoch: So I'm not sure if that's very different from what everyone else is doing, but it's a structure that we think works for us and has certainly proven its value in the marketplace this year. In terms of what we'll do with our balance sheet and how we deploy capital, I think we are careful and prudent deployingers of capital. That's going to continue. We have the right mix of investment, capital investment in the business, of organic investment in our businesses in return for shareholders, and then increasingly our focus on M&A.

Lachlan Murdoch: We have nothing to update you on in the latter category, other than to say we're going to be prudent and careful. But we are aware that M&A remains one of the important levers that we have in how we

Operator: Your next question comes from the line of Michael Ng from Goldman Sachs. Please go ahead. Hey, good morning. Thank you very much for the question.

Michael Ng: Hey, good morning. Thank you very much for the question. I'll ask one on Tubi, you know, mid-teens revenue growth, which is great in the quarter despite some heightened competition on the connected TV side. I was wondering if you could just talk a little bit more about that strength and then give us an update on where the digital investments losses ended up this year in fiscal 24 and your outlook for fiscal 25. Thank you.

Speaker Change: Great let.

Steve: Let me start with <unk>, then I'll hand over to Steve.

Lachlan Murdoch: 2B continues to go from strength to strength. I think, you know, importantly, exiting the fourth quarter with revenue growth in the mid to upper teens was, I think, very good to see, to see that momentum as we moved into July. And we've seen that momentum continue into this quarter in July. But you have to put that in context of a tremendous supply of advertising entering the streaming market with Amazon Prime entering the advertising-supported streaming business.

Speaker Change: <unk>.

Speaker Change: Two week to week continues to go from strength to strength.

Speaker Change: <unk>.

Steve: Importantly, exiting the fourth quarter.

Steve: With revenue growth in the.

Speaker Change: The mid <unk>.

Speaker Change: Our teams.

Speaker Change: It was very very good to see to see that momentum as we moved into July and we've seen that that momentum continue into this quarter or in July.

Speaker Change: <unk>.

Speaker Change: You have to put that in.

Speaker Change: In context of a tremendous some supply of advertising entering into the upstream market.

Speaker Change: Amazon Prime entering the the advertising supported.

Speaker Change: Streaming.

Lachlan Murdoch: That caused a lot of other streamers to really fight hard for their revenue and drop prices. Tubi did not have to; Tubi had stable pricing in this market and really drove its growth on the strength of its brand and the tremendous reach and quality of its audience. So we're very pleased with that, and we expect further growth in Tubi as the year progresses. Thanks, Lachlan.

Speaker Change: Business that caused a lot of other streamers to really fight hard for their revenue and drop I've dropped pricing.

Speaker Change: <unk> did not have to be a stable pricing in this in this market and really drove this growth on the strength of its brand and that they are tremendous.

Speaker Change: Tremendous reach.

Speaker Change: And quality of its audience. So we're very pleased with that and we expect further growth and to be as the year progresses.

Steven Tomsic: Good to hear from you, Mike. So just in terms of investment, if I look at where we landed for fiscal 24, Tubi was the single largest driver of investment across our growth portfolio. Its level of investment was at a consistent clip to where we were in fiscal 23, so the mid sort of 200 range. And if I look across all the other growth businesses, whether it be Nation, Weather, Credible, the entertainment studios that we're building out, they collectively sum to about another 100 million in rough numbers. Looking forward to fiscal 25, I think most of the improvement comes from a little less investment at 2B, which should put us in the high 2s, I think, from a net investment perspective.

Glenn: Thanks, a lot Glenn.

Glenn: Good to hear from you Mark So just in terms of investment.

Speaker Change: If I look at where we landed for fiscal 'twenty CV was the single largest driver of investment across our growth portfolio.

Operator: At this point, we're out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today. Ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect. We're sorry, your conference is ending now. Please hang up.

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

Operator: Welcome to the Fox Corporation fourth quarter fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would like to emphasize that functionality for the question and answer queue will be available at that time. If you should require assistance during the call, please press star then zero.

Gabrielle Brown: As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Gabrielle Brown: These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filing. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA, as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filing, which are available in the investor relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Lachlan Murdoch: Looking back, there were clear achievements across our businesses in fiscal 24, including delivering strong total company affiliate revenue growth each quarter from our ongoing renewals, cementing Tubi's position as the most watched free TV and movie streaming service in the United States, and generating reinvigorated ratings and share growth at Fox News. The power of our brands and our ability to deliver engaged audiences at scale across our platforms remains remarkably strong. Total time spent viewing all Fox brands increased in fiscal 24, despite the absence of the Super Bowl and FIFA Men's World Cup.

Lachlan Murdoch: TV viewing time, as measured by Nielsen, grew 57% in fiscal 24, with absolute growth in minutes of viewing, easily surpassing the growth of leading subscription video-on-demand services. Fox Sports' Big News Saturday was the number one-ranked window in college football for a third straight year, while America's Game of the Week hit an eight-year viewership high this fiscal year. And Fox News was again the most-watched network in cable news in Fiscal 24, with 52% more minutes of viewing than its closest competitor.

Lachlan Murdoch: Our foundation for this coming fiscal year is solid, as we carry the momentum from fiscal 24 into another year of major events, particularly for our news and sports business. The recent news cycle has been nothing short of extraordinary.

Lachlan Murdoch: And when news breaks, people turn to the news brand they trust. The strength of our news coverage is unmatched, and Fox News remains the clear first choice for viewers during the most pivotal moments. The fourth quarter saw audience levels return to growth at the Fox News Channel, driven by our political coverage and strong primetime lineups. Fox News exited the fiscal year as the most watched network in all of cable, in total day and in prime Time, and gained share amongst cable news networks in both prime and total day versus last year.

Lachlan Murdoch: And the Fox News Channel rated number one across all linear television in July for total viewers in Weekday Prime, beating the nearest broadcast competitor by nearly 10%. These positive trends bode well for news as we continue through this extraordinary news cycle. But news is not our only business with great momentum. Tubi is also enjoying impressive viewership metrics and revenue growth. It has improved upon its status as the most watched free TV and movie streaming service in the U.S., finishing the fiscal year at a record high of 2% of total TV viewing.

Lachlan Murdoch: Tubu saw continued momentum in viewership during the fourth quarter, reaching an all-time high of 81 million monthly active users and growing total view time by 17 percent, driven by an expansive library that offers something for every consumer. Not only is the Tubi Library the largest in the U.S., but it also has unique content that audiences can only find on Tubi.

Lachlan Murdoch: Notwithstanding a complex digital advertising marketplace and a tough year-on-year comparison, this viewership drove 7% revenue growth during the quarter. Importantly, however, we ended the month of June with revenue growth in the teens, and that pace has continued into this quarter with steady pricing despite increased inventory in the overall market.

Lachlan Murdoch: Over at Fox Sports, the fourth quarter was very active, thanks to Fox's Summer of Soccer, which exceeded all expectations and set viewership records. The UEFA European Championship averaged 1.7 million viewers across the Fox broadcast network and FS1, a 34% gain over the 2021 tournament. Cobra America averaged 1.4 million viewers, a three-time increase over the 2021 tournament. The two finals also broke records and now rank as the most watched soccer matches ever on Fox, other than World Cup matches.

Lachlan Murdoch: But it's not just soccer that our audiences are watching. The regular season of Major League Baseball is also trending positively, and our special broadcaster, the Rickwood game, and the MLB All-Star game each performed well above expectations.

Lachlan Murdoch: And in just a few short weeks, we welcome back the NFL and college football on Fox. Our 2024 NFL schedule will start strong. Fox's first four America's Game of the Week windows include three Dallas Cowboys games and a rematch of last year's Chiefs versus Niners Super Bowl. Of course, our schedule ends strong too, culminating in Super Bowl 59 this February on Fox. Also debuting this fall will be a new lineup from Fox Entertainment, with the return of popular shows like Hell's Kitchen and The Masked Singer and the debut of new dramas like High Surf and Murder in a Small Town, which many of you saw a preview of at our successful Upfront presentation in May.

Lachlan Murdoch: Speaking of the upfront, we see a much healthier market than the nuanced one I referred to six months ago. As evidence, our upfront commitments were strong. Our focused portfolio of market-leading properties in sports, news, entertainment, and streaming delivered year-over-year growth in both linear and digital advertising commitments, as well as growth in overall portfolio pricing this year's upfront. Notably, we saw double-digit volume growth and stable pricing at Tubi, which is testament to its incredible momentum in the streaming market.

Lachlan Murdoch: At the local level, we are expecting a very robust election advertising cycle that will be weighted to our second quarter. If anything, as polling tightens, the election map may be extended to more of the markets in which we operate. As we enter a very exciting fiscal 2025, we will continue to focus on execution with events such as the U.S. election cycle at our local stations and Fox News Super Bowl 59 on Fox, the renewal of one quarter of our distribution revenue, and the launch of the venue sports streaming service in the fall. Our strong, differentiated position, coupled with the strength of our balance sheet, underpin our confidence in continuing to deliver meaningful shareholder returns. And with that, I'll hand over to Steve.

Steven Tomsic: Thanks, Lachlan, and good morning, everyone. Fox once again delivered financially in fiscal 2024 with total company revenues of almost $14 billion and adjusted EBITDA of $2.88 billion. We successfully completed approximately one-third of our affiliate renewals this year, with the financial benefits of these renewals driving 4% growth in total company affiliate fee revenues, led by 9% growth at the television segment. Our fiscal 2024 results compare against a prior year of marquee events, including the record-breaking Super Bowl 57, the FIFA Men's World Cup, and the midterm election cycle.

Steven Tomsic: As anticipated, the comparison to these cyclical events contributed to an 18 percent decline in total company advertising revenues. Total company other revenues were down 4% year-over-year, with high sports sub-licensing revenues more than offset by lower content revenues impacted by the SAG and WGA labor disputes. Total company expenses decreased 5%, largely due to the absence of costs associated with the Super Bowl and Men's World Cup in the prior year. However, this was partially offset by the first-year step-up under our new NFL Rights Agreement. Also contributing to this overall decrease in expenses will be lower entertainment programming costs due to the strike.

Steven Tomsic: Net income attributable to stockholders was $1.5 billion or $3.13 per share, up versus the $1.24 billion or $2.33 per share reported in fiscal 2023. Restructuring, impairment, and other corporate matters were impacted by charges associated with the Fox News media litigation last year, and them all, excluding non-core items, 4-year adjusted net income was $1.65 billion and adjusted EPS was $3.43 a share. Turning Fox delivered total revenues of $3.09 billion, up 2% from the prior year quarter, and quarterly adjusted EBITDA of $773 million, up 5% from the prior year quarter.

Steven Tomsic: Total company affiliate fee revenues grew 5% over the prior year, with growth at both our television and cable segments, supported by our recent cycle of affiliate renewals. However, total company advertising revenues were flat, as the revenue generated from our summer of soccer and growth at Suvy was offset by lower ratings and pricing at the Fox Network. Total company other revenues were down 11%, primarily due to a lower volume of third-party content sales in the current year quarter. However, growth in total company expenses was held to 1%.

Steven Tomsic: Here, costs associated with the broadcasts of UAC Euros and Copper America, along with digital investments at Tubi, were partially offset by the deconsolidation of the USFL and lower programming and production costs at Fox Entertainment from the higher mix of unscripted versus scripted content. Net income attributable to stockholders of $319 million, or $0.68 per share, was down versus the $375 million or $0.74 per share reported in the prior year quarter. However, excluding non-core items, adjusted net income in the quarter increased to $423 million while adjusted EPS grew 2% to $0.90 a share.

Steven Tomsic: Now turning to the quarterly results of our main operating segment, Cable Network's fourth-quarter revenue grew 2% year over year. Cable affiliate fee revenues increased 2% with growth in pricing from our affiliate renewals outpacing the impact from industry subscriber declines running in the mid-8% range. Cattle advertising revenues grew 3% at the, At the National Sports Networks, advertising benefited from the broadcasts of CONMEBOL COPPER AMERICA and the UEFA European Championship. At Fox News, ad revenues benefited from higher pricing, improved ratings, and slightly lower preemption, had leather revenues were essentially unchanged from the prior year quarter. Cable expenses were 11% lower than the prior year quarter, primarily due to the deconsolidation of the USFL and lower programming costs of Fox News, partially offset by the UEFA Euros and Copper America.

Steven Tomsic: All in, quarterly adjusted EBITDA at the cable segment grew 20% over the prior year quarter to reach $703 million. Turning to our television segment, where we delivered 2% growth in quarterly revenue. This was led by 9% growth in television affiliate fee revenues, as price increases across Fox-owned and operated and Fox-affiliated stations continued to outpace the impact from subscriber decline. However, television advertising revenues fell 1% as the broadcasts of the UEFA Euros and Copa America and growth at Tubi were offset by lower ratings and pricing at the Fox network.

Steven Tomsic: Television and other revenues fell 19% in the quarter, primarily due to a lower volume of third-party content sales. Expenses at the television segment grew 8% over the prior-year quarter, primarily due to costs associated with UEFA Euros and Copper America and digital investment at Tubi, partially offset by lower programming and production costs at Fox Entertainment. Taking all these factors into account, quarterly adjusted EBITDA at the television segment declined 35% against the prior year quarter to $148 million.

Steven Tomsic: During the full year, we generated free cash flow, which we define as net cash provided by operating activities less capex, of $1.5 billion. Before we get to capital allocation and the balance sheet, it is worth noting some key items for this coming fiscal year. Most notably, we return to another major event cycle in fiscal 2025, led by Super Bowl 59, which we expect will drive significant growth in both advertising revenues and free cash flow.

Steven Tomsic: However, this is the first Super Bowl under our new NFL contract, and accordingly, we'll have elevated rights amortization. We continue to expect strong political advertising in the first half of the fiscal year from the election cycle, which will particularly benefit our stations group.

Steven Tomsic: As a reminder, our share of ownership results from Venue will be recorded below EBITDA in Equity Earnings. Returning to capital allocation, over the course of the fiscal year, we returned $1 billion of capital through the repurchase of 40 million Class A shares and a further $250 million in dividend payments. Underlining our continued commitment to shareholder returns, today we announced an increase in our semi-annual dividend to $0.27 per share. Since the payment of this dividend, and taking into account share repurchase activity since year-end, we will have cumulatively returned over $7.25 billion of capital to our shareholders since the spin-off in 2019.

Steven Tomsic: This includes $5.65 billion of share repurchases, representing over 27% of our total shares outstanding since the launch of the buyback program in November 2019. This is all supported by the strength of our balance sheet, where we ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt. And with that, I'll turn the call back to Gabby to get started with Q&A.

Gabrielle Brown: Great, thank you, Steve. And now, we will be happy to take questions from the investment community.

Ben Swinburne: Thank you. Good morning.

Lachlan Murdoch: I want to ask about Venue, which is launching quite soon. You guys have announced, or they have announced, the price point. I guess Lachlan, how are you thinking about this product now that you know it's about to launch and the pricing's out? You've given us some sense of the sort of longer term. subscriber potential, but I didn't know if you wanted to revisit that or just share your thoughts on how you think that product fits and who the audience is.

Lachlan Murdoch: Ben, thank you very much for the question and good morning. Obviously, a number of milestones have been achieved in the development of Venu as we've gone through the beta phase and as you lead towards the launch later this month. This new beta is released practically every day, and the product looks both excellent, really good, but also quite revolutionary in the way Americans are going to view sport, so we remain incredibly excited about it.

Lachlan Murdoch: Venu announced their pricing of $42.99 as an initial launch price. We think that really hits the right mark and the target for where we want to be as a business, but also as a consumer proposition. And there's really no update on our expectations of 5 million subscribers over 5 years. That's what's in the business plan, and that's what we're aiming to achieve. Steve. Yeah.

Steven Tomsic: Thanks Ben. So in terms of impact and financial statements, obviously we had a two-sided relationship with Venue Sports. As a shareholder, the business is going to take some time to sort of get the cash flow break even, so from a shareholder perspective, you'll see that investment come through, we'll take the deficit through equity earnings in the P&L and investment through the cash flow, but obviously we're a key supplier to the JV being a content supplier of our sports networks, and so the benefit of that you'll see come through in our affiliate fee revenues, both in cable and TV, so it's a touch early, I think, we're still not 100% locked down in terms of launch date, to give you any sort of guide on quantum in terms of fiscal 25 impact, but as I said, I think a couple of earnings calls ago, on a net-net basis, it should be accretive to us on a pretty quick basis.

Operator: Operator, next question please.

Operator: Your next question comes from the line of John Hodulik from UBS. Please go ahead. Great, thank you, and good morning.

John Hodulik: Hey, thanks and good morning. Maybe a couple quick questions on the ad market. First of all, on the TV side, you guys mentioned lower pricing that you were seeing; could you delineate what you're seeing on the sports side versus on the entertainment side? On Facebook, Twitter, YouTube, and on cable; just any outlook you can provide on the cable ad outlook, just given the strong ratings we've seen thus far in 3Q. And lastly, on politics, as we sort of head into this. You know, what I would call an unprecedented sort of political situation. I mean, just any way to sort of size what you expect from political spending versus other or previous presidential elections would be great.

Lachlan Murdoch: Thanks. Thanks very much, John.

Lachlan Murdoch: Going into the upfront, to be totally honest, there were ins and outs, there were some headwinds that you could see, and we were... still remain cautiously optimistic about what could be achieved, but we actually came through the upfront above our expectations, and again, I'm pretty pleased with the momentum that we saw in our businesses. Of course, this was led by sports, both with the sports inventory that we have and the marquee events that we have, culminating in Super Bowl 59 this year. was incredibly strong, not just in football but also in Major League Baseball, so we're very pleased with that.

Lachlan Murdoch: When we then look at politics, The Georgia runoff, right, so if you look at the apples-to-apples political cycles, we would expect a record political cycle this year, and in particular, as the race heats up, we're seeing more money flow into the marketplace, and a new marketplace is emerging, as I mentioned in my prepared comments, as the race tightens. For instance, Atlanta and Phoenix, where there's a significant amount of money now being placed, only in the last... a couple of weeks. So we do, you know, expect a very robust political cycle. And we think it will be a record political cycle.

Operator: Your next question comes from the line of Robert Fishman from Moffett Nathanson. Please go ahead. Hi, good morning, everyone. Can you share your latest expectations?

Robert Fishman: Thanks so much.

Lachlan Murdoch: On growing affiliate fees, we expect to continue to modestly grow our affiliate fees in light of the obviously declining volume of subscribers. I think we've called out in the past quarter, the last quarter, that sort of reduction in subscribers is around 8%, mid-8%. And as that continues, we'll be able to grow our prices above that, but it's going to be modestly above that number. And that's really based on the focus of our core brands, the fact that we're not carrying the baggage of any entertainment cable channels or legacy channels, which would have to use the leverage of Fox News or Fox Sports to support. We can be entirely focused on driving appropriate value for our core cable brands and also for our television stations.

Steven Tomsic: Yeah, and Robert, in terms of content span, if I just go through the sort of the key verticals we have at sports, we've got regular amortization increases, obviously, the NFL is the single largest piece of that. In fiscal 25, that's partially offset by the fact that in October we move away from WWE and program that with college sports rights, to be I think you should expect us to continue to grow content. Some of that is active in terms of licensed content and originals, and some of that is passive because so much of the revenues come from revenue-shared deals, and so that just grows with the amount of usership and advertising growth. The news is pretty modest growth.

Steven Tomsic: A lot of that has to do with talent and breaking news coverage, and that's sort of very predictable. And then the final one I think you were alluding to was entertainment and the shift from scripted to unscripted. With that, it's probably worth noting that Fiscal 24 obviously was very impacted by the strikes, and so you had a very significant shift from scripted to unscripted programming. And that is, well, partially thematic. In Fiscal 24, that trend was particularly amplified, and it basically saved us north of $100 million in entertainment programming costs.

Operator: Operator, we can go to the next question.

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

Jessica Reif-Ehrlich: Thanks. One follow-up and one question. So in the follow-up... Sounds like you had a great up, I'm wondering... the first year of your new ad sales team, is there anything that they're doing that's anything different than our code? You obviously had a great result, but you also had great events.

Lachlan Murdoch: And then secondly, one of the... Key assets of the company is your balance sheet strength. Just wondering, you know, since you're already in live news and sports, there are a couple of areas of the traditional media industry that are still growing. Where do you see your next opportunity? Thanks very much, Jessica. Good morning. First, on the ad sales team.

Lachlan Murdoch: Thanks very much, Jessica. Good morning.

Lachlan Murdoch: Going into the upfront, we're structured, I think, a little bit differently than some other media companies. I'm not aware of the structure of the advertising and sales organizations across the entire industry, but we retain expertise across the verticals. So we have a very focused sports team, we have a very focused news team, entertainment, and importantly, more and more, our digital team, which is obviously a great part of Tubi. So while we have expertise in those teams, at the upfront, we're able to sell across the entire portfolio, that one Fox portfolio, and that proved to be very successful and very effective in this upfront.

Lachlan Murdoch: So I'm not sure if that's very different from what everyone else is doing, but it's a structure that we think works for us and has certainly proven its value in the marketplace this year. In terms of what we're going to do with our balance sheet and how we deploy capital, I think we are careful and prudent deployers of capital, and that's going to continue. We have the right mix of capital investment in the business, of organic investment in our businesses, in return to shareholders, and then increasingly on M&A.

Lachlan Murdoch: We have nothing to update you on in the latter category other than to say we're going to be prudent and careful. But we are aware that M&A remains one of the important levers that we have in how we define M&A.

Operator: Your next question comes from the line of Michael Ng from Goldman Sachs. Please go ahead. Hey, good morning. Thank you very much for the question.

Michael Ng: Hey, good morning. Thank you very much for the question. I'll ask one on Tubi.

Lachlan Murdoch: You know, mid-teens revenue growth, which is great in the quarter despite some heightened competition on the connected TV side. I was wondering if you could just talk a little bit more about that strength and then give us an update on where the digital investment losses ended up this year in fiscal 24 and your outlook for fiscal 25. Thank you.

Steven Tomsic: 2B continues to go from strength to strength. I think, you know, importantly, exiting the fourth quarter with revenue growth in the mid to upper teens was, I think, very good to see, to see that momentum as we moved into July. And we've seen that momentum continue into this quarter in July. But you have to put that in context of a tremendous supply of advertising entering the streaming market with Amazon Prime entering the advertising-supported streaming business.

Steven Tomsic: That caused a lot of other streamers to really fight hard for their revenue and drop prices, but Tubi did not have to; Tubi had stable pricing in this market and really drove its growth on the strength of its brand and the tremendous reach and quality of its revenue.

Steven Tomsic: Good to hear from you Mike, so just in terms of investment, if I look at where we landed for fiscal 24, Tubi was the single largest driver of investment across our growth portfolio, so its level of investment was at a consistent clip to where we were in fiscal 23, so the mid sort of 200 range. And if I look across all the other growth businesses, whether it be Nation, Weather, Credible, or the entertainment studios that we're building out, they collectively sum to about another 100 million in rough numbers. Looking forward to fiscal 25, I think most of the improvement comes from a little less investment at 2B, which should put us in the high 2s, I think, from a net investment perspective.

Operator: At this point, we're out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today.

Operator: Ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference.

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