FOX - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, I would like to emphasize that the functionality for the question-and-answer queue has recently changed. Instructions will be given at that time. reminder, is a recorded. As Instructions] this being conference [Operator Chief conference Officer Corporate I’ll the to Initiatives, Investor of now turn President over Relations Vice and Mr. Executive Dorrego. Joe Please go ahead, sir.

Joe Dorrego

XXXX morning to operator. and you, earnings call. Good our Thank fiscal second quarter welcome

today on Operating Executive Chief Chairman Lachlan me Steve and Tomsic, Executive Joining Financial are John Officer. Chief Officer; Murdoch, call the Nallen, Officer; and our Chief

and Investment most Community. give and financial differ operating statements from recent Steve note in filings. the regarding on First, will some identified questions prepared from on result based could statements take stated Lachlan expectations, is call factors management's the a and company's as quarter, performance this SEC current results. the These what of Please then results that call forward-looking and may today's we'll and remarks include actual certain Corporation's are on Fox

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

Lachlan Murdoch

the Good were company-wide calendar XX%, growing Stations, our our These growth propelled led X%. results more we of and and strength EBITDA advertising net political grew XXXX. momentum revenue cycle, and in of The joining Tubi. second Thanks, strong dramatic results gains News operationally, by with for Joe. continued by gains by which during discuss spurred overall revenue morning million by $XXX which impressive record our Media, by FOX thank Television advertising revenues, political the growth than at FOX generated by XX%, quarter was to in financial and us all you we results. Financially driven in exceptional of quarter

credits. power pricing affiliate of X% advertising reserve grew the by a Beyond of substantial despite revenues distribution our our because and potential brands, for taken

in for While the consecutive a improved volume, quarter. we decline trend experienced third subscriber the

This evolution. QX. is quarter, more above in performance assets the the we basis than what The of experienced saw contributions industry declined anchor which of the point X%, core financial new is improvement the we lay of strength our Fox a and just that for groundwork illustrative from brands company and to continued rapid of of XX growth subscribers

stations last been across you active As gains know, the the new as Media. directly all extensions the and and networks to over our cycle as local quite year has FOX has well led the it News of all

example, at ability the in report election, also provide Fox’s local candidate in on X national voters. FOX programming full best significance and produced coverage they during our Atlanta debate Georgia colleagues news FOX display expanded the focused held to a to runoff the Georgia the issues response only at Not news on did For the Georgia impacting of viewer demand, was on runoffs. special Senate X

number the one in begets morning block. work During news station Hard period, was awards. runoff for entire X Atlanta the FOX X.X-hour just

opinion. various the to amount the revenue total it’s for for across platforms: approximately times cycle. million, three $XXX the connect the engaged news, linear, so, greater digital, replicated Stations FOX also and last an analysis audiences news stations the was first FOX the surprise than This the cycle to more radio, Media News continued to presidential streaming generated. in year The of market Net success footprint. fiscal than bringing and our And in quarter, half political we revenues no political Television $XXX led the approximated in million

early FOX the in News weekday beating the average the network Channel News XXXX. continuously all FOX highest the of ratings the closed and total television averaging the prime number as one news. viewers. time since television in prime The the and networks with in FOX quarter News year calendar cable months time, Channel of finished viewers fact, was coverage history In networks XX% all topping election broadcast night share prime time, during total very number one of

audience call and record calendar We dominate. is on share pullback and are While election of our cycles. we with overall ratings XXXX expected were that ratings which fully now that breaking, seeing the anticipated consistent the we post-election prior audience will quarter, news normalize will this expect last

inauguration. our trend this versus fact, beginning substantial since already the is we competition as share gains In have seen

past, last all programming business. Network Suzanne including welcome with FOX her and has consumers reach the has is term a fortunate brand. her seen the on and us in positions ability Media has happy the Kudlow’s Larry growth. the company. also years, her its FOX News announce changes Under Suzanne we extended innovate Larry FOX ideas I’m will her openness I’ve break, CEO, to over and Suzanne next News that expanded to to and long-term strength News I’m Business premiere as implementing, ability leadership, that opportunities As to week. that that new action are newsroom to breadth the guide for sustained businesses closely of show with the grow new Scott, to several FOX work seamlessly the FOX. our confident with media in her We I’ve Media stories pleased been significantly multi-platform diversified for to to become

company. Turning the to areas other of

proudly own fall and atypical flock of live why nearly had of mix included numbers events the network. post-election. fall. even claims the postponed sport an earlier Tubi that FOX in competing our it it leadership Our demonstrates to sudden Fox year minutes unexpected and viewing with than was the assets in been above sports live crowded fall, the billion Even out-of-season XX% and clocked more and Sports cancellations. Sports correctly and next XXX schedule, within greater viewers and to events FOX

year’s NFL broadcaster but popular broadcast window. sport. proud for that of and eclipsed NFL XXth many is or to Fox, I later was the last know live Sports of this sports the of completing for Elsewhere, NFC NFL With about its Championship of biggest that FOX team Our sports call associated the Commissioner audience a that preeminent now last during America’s am Bet our the this historic million FOX we deliver professionalism user season free-to-play return continues FOX able to NFC the both to most XX incredible our wagering of not leadership worried I the nearly Proud Goodell Championships X base achievement. X players if the for NFL congratulate very fell country. short. Fox NFL to demonstrated team tuning to the excess favorite of risks in Super you partnership, the word in game and season the game, on boosted to concept, its has be season After be viewers million players adding a nearly and such kind of season. want a at Fox and continues of X.X Sunday. broadcast we the the were to the the the Bet. season, during I of It’s million in my testament

Super with contests. successful our track X non-sports record continued also We

the Corporation, mobilized model entire broader strategic clearly for engine Stock support and the is merits a expansion, X promoted focused acquired to Tubi, Friends, for Quiz recently generally a less reimagining on Show Challenge fashion, Market only which FOX example, the which us who a and Georgia Senate A fully enabled the company core growth fans as already supercharge ago. differentiator Super For is than non-sports some and game broadcast This the runoff Bet & strategic a Fox Fox covering have portfolio similar Bet commentary. we we for ignite game weekly has also to Fox asset and Fox’s with key In future. year Tubi of an across of wouldn’t FOX been but Fox’s launched engage of brand. digital wagering exciting not brand. our all the the for key power for acquisition, interact platform to promotional assets the our

of create network-inspired combining a fact, streaming and portfolio, linear Both our And I into focused investment offered is from we believe Fox’s the positioning and make the we modern in in with distinct when our leader as viewers, and broadens ecosystems. Network unique Tubi business. meaning and With of Tubi and to FOX Tubi coupled Fox deliver to together. advertisers internally as leader Fox operated in network broadening broadcast, and call being business, them more impactful network-first a market technology part In approach, television seamlessly a value an believe what Tubi already. the broadcast partners even Tubi’s

growth focus year-over-year across already I’ll expectations. the marketplace and broadcast well our that momentum ahead. Tubi, on our significant have continues acquisition the beyond Tubi increases key network so of and it we know dramatic seen differentiation, and sustainable to best and envision even grow metric meaningful You results every the

triple, the half grow unique by double. we view than Over than more have of total revenue first more XX% seen the viewers time yearly nearly year, and

In past acquired year for before the company. fiscal alone the this fact, we entire approximated quarter Tubi’s revenue for broadly revenue Tubi’s

profile advertising revenue on partners when AVOD is that advertising attention Tubi is audience. our proportional opportunities. services active viewership View is streaming think digital with to inventory most of to or the any metric the like is it TVT, as users, or and performance that we service It some metrics this direct While has relationship and of ups driving sign Total focus Time engage monthly measuring meaningful

a color to vast on by continue to design, you technology plans library, to broad audience. a me strategies. Looking let to synergies more ahead caters our bit content boost our give content, Tubi, Tubi’s and

Singer and The of with sensation provides power to The strategically combined. a seeking adds program complementary addition a that – perfect Singer when diverse platform the show of to Fox to was be we Fox. marquee continue the When Tubi from on it Tubi, the added Masked of young, program Masked these offering. We advertisers Fox associated its on example note. other time broadened The advertisers, assets added to of delivered The add with to for reach titles other view and it every significant to launched and offerings nearly audience the Tubi

results for its provide advertisers. enhancing differentiator technology Tubi better technology. is is its constantly Tubi important the digital ad Another data and to to

households make platforms, Tubi AVOD to to ahead. brand a frequency compelling ad show than well. the the enabled by same stack AVOD early brand this FOX which the often same technology a is separate to acquisition. is viewers options In management stated, brand, advanced Tubi case to rather Tubi who over this the in rapidly multimillion-dollar for more to FOX frequency Tubi years other insurance to from find These now ad with nearly XXXX, the led tool, tool from to the its We’ve also offerings example, tech reduces with tool more relationships recently more XXX,XXX other Simply advancements will Tubi than results to general synergistic study way insurance lesser reduced across payment success and Tubi’s repetition. had brands. XXX%. incredible existing a ad advertiser months a with continuing insurance advertise and introduced has company come. as throughout ad the Expect their Tubi’s within the same as advertisers viewers, buy. major become same For to in also

advertisers, Tubi XX into previously been unique of and combining audience, with buy to season. chose Tubi reached worked Tubi’s a our their which recent upfront advertisers have pay-TV may of during instance, subscription. had who with not doesn’t brands additive that XX% portfolio nearly have unfamiliar By Tubi, we For

focus a We and at monetization laser growth on Tubi. have

Tubi, of financially, Tubi become expect Fox believe in for AVOD the in out of Translating a become and the growing will exceed than pillar digital current revenues in more alike, million. over this As FOX. fiscally built tremendous business. we a and invest larger of we And continue Corporation we the choice time is businesses, becoming pre-existing as business year, our have which a to core a double viewers manner. to we and addition platform Tubi to piece it look billion fiscal advertisers years, of to digital few Tubi a portfolio a broader $XXX $X we responsible we envision

the year, Sports, than digital television and Tubi have representing of million more of comparable first Television monthly our with fiscal of average partnerships FOX first These and growing we more exceeding Over in users These XXX increase content XXX prior attracted half News, the over a advertising expectations. XX% Credible, in XXXX. than approximately revenues. half linear our coupled $XXX two-thirds over market time, billion must-have fiscal half users, Stations, of destinations this consuming businesses of digital an first digital and than digital through the year. brands the period increase from digital our year, minutes our XX% more Tubi’s during Entertainment fiscal rapidly have with revenue with are along generated million our the expanding platforms, well spent

united through a new businesses even are the collaborate, engaging And they and rates touch audiences, ways harnessing wide to consumers now, As portfolio, quarter. for viewers, with of the will Steve existing the details stronger with in points users have run take us FOX. retaining broadening the new

Steve Tomsic

second along company underlying our and with momentum double-digit Lachlan, and morning. good revenues our advertising affiliate fiscal Highlighting revenues double-digit businesses, the across in Thanks. in the growth strength quarter. delivered growth in

by Television inclusion FOX News digital XX%, revenues advertising Media. led continued the Tubi, total at Our of FOX linear and growth and this the strong Stations, strength with increased

$XXX we was company revenues record our brands recent When across of Total on affiliate advertising portfolio of earnings most strength million, million. once revenues. advertising again fiscal demonstrating at quarterly political in entirety $XXX an the to approximately quarter, channels. we television the leadership digits basis by call, year-to-date the viewed our growth revenues double our driven focused portfolio, generated on underlying our the bringing our As of previewed our and approximately political increased stations of

we During canceled college games. credits for recorded due the accrual quarter, football to distribution potential an

over in revenues programming growth to $XXX XXXX, fully lower the in X%. the total key basis, comparative comparative was most the other adjustments for million in up reported a This revenues $XXX per total in net the franchises. period costs, the the of the recognized significant fiscal increases revenue $X.XX over billion, result from company’s share XXXX. associated line escalators million with in offset prior this prior was period reported adjusted our to strength notably share $X.XX the revenue due up or Quarterly $X.XX our attributable partially was income than offset While in credit year quarter. or X% EBITDA fiscal to $XX per company most sports decrease million, affiliate This by of top gains was two million our company higher year drove contractual quarter, stockholders mark-to-market streams our annual Net investments. in was in $XXX on the

EPS share to in last Excluding this impact compared was per share, of $X.XX up per and primarily other $X.XX non-core the items, year’s $X.XX adjusted reflecting growth EBITDA.

which FOX the double-digit mid-single Underlying digits. rate little with X%. increased growth at erosion, for underpinned This million, growth. Media affiliate including on Turning along was with $XXX increases, to revenues the by performance over cable of subscriber of revenues moderation pricing record our operating gains digital X%. EBITDA up a in of industry a trending News X% is engagement the FOX at quarter, with and leading XX%, of revenue audiences the cable advertising increased News Media, of was segments growth networks Cable currently this rate

there the of number earlier, games. cancellations football were mentioned related of I a during COVID-XX college quarter, As

an As credit potential a result, accrual have we for fees. of recorded certain the distribution

both partially our our certain affiliates political incremental over period. well advertising primarily of due the year growth sports to were just stations. station our I that Tubi. reflects Television COVID-related as of segment strong revenues quarter loss reduces on from reflects costs. sub-licensing increases of affiliate lower revenue million. growth revenues revenues, were with games, result to operated FOX that credit this fees revenues, increases costs segment cancellation our revenues $XX FOX program. retransmission contractual factors to growth entertainment segment of offset record certain revenues prior since the for in impact increased and Television Television into to million lower to quarter sports partially as from it fast-growing due our This at including consistently These earlier, by segment is costs Fox delivered in Entertainment offset scripted college $XXX annual foreshadowed at along revenues reported advertising The by quarter. the amortization the by the Cable by EBITDA for the the COVID-XX. double-digit a Partially cable result $XX from cancellations higher in of This was our owned Corp, cable games decreased in NFL, by call. rights million the million EBITDA football offset football I rights corresponding major the reported certain Television This as offset I we broadly was first with The the postponement sports prior by programming establishment a at increased due period. improving coupled Continuing just of costs. reflects EBITDA programming scripted due the the of amortization advertising lower of second fiscal of over noted, year sports key that growth again our noted, increased and we’ve broadly by increases a corresponding affiliate including postponement direct reduction XX% of lower of at with rights $XX the revenues as and reduction programming rights Sports, a our also in XX%, other the revenue driven These the offsetting mentioned of revenues, of the due addition non-owned programming key sub-licensing COVID-XX. rights the to Tubi. consolidation revenue our the the college entertainment these last franchises, primarily the shift growth While XX%,

the we which by plant is activities, of loss $XXX today the semi-annual equipment. as Turning of our in announced to of repurchase program. capital operating cash our and share allocation, continue confidence quarter, a flow and seasonality stock balanced business. working cash in which we free a less invested and consistent with continued free million, to property, our dividend provided per In Reflecting approach business now in be capital with cash the calculate generated active to we net our cash $X.XX flow,

So our have A of and to year, this deployed $XXX million shares repurchase XX.X of fiscal B X.X million $X billion. million against far, authorization Class approximately we buyback capital Class shares

of balance outstanding now in in have the $X approximately X.X% We November total and $X.X ended repurchased perspective, we sheet XXXX. shares our a in quarter launch cumulatively with billion From over representing just buyback billion, the program since of $X.X cash the debt. billion

Looking through year our impact is you will comp on year’s year. XX quarter, reminding the Super of the comparability Starting factors FOX. March that to fiscal last the second prior half with of will the In a against with Sport. Bowl worth broadcast, we current few

enjoy game of well the did the season, we as January. one additional playoff the this rotating However, benefit of week divisional as regular

timely Our also plans the anticipate season. start League Major a NASCAR Baseball and to

we FOX production as an network our still into of shifted with to of calendar. in season demonstrated our to has our disruptions launch sports second minimal completion the the schedules. adapt scripted from year, future our will on disruptions from due titles However, have half entertainment Meanwhile, dependent the key across COVID-XX, on fiscal the any of first to past, half potential the perspective, full we COVID-driven

the exhibited the in fiscal usage as to half second over a year; the working result, reverses first capital in In of relatively this terms deficit year’s we low course and of full working the of capital cash anticipate year. half the normal flow, continue

of our and of in build foreshadowed continue the a of final local to we technical facility we upgrade some the expect phase our support expenditure fiscal in of of in to facilities. the higher XXXX station past, broadcast Arizona the out level capital As

earned from a position full light already of majority advertising fiscal in very we already a liquidity, a this year the that of working will half year first of capital and of the affiliate strength. tailwind slate our With the approach revenue our half, on second financial build ample renewals

half environment, additional in macroeconomic fiscal intend and our Assuming to a both the targeting this flow results reach for at total now constructive this $X first operating Its in I buyback towards an $XXX repurchases volume we to benefits the the future. the our back of particularly leverage, continue two million capital continuation year. underlying billion cash deploy of sum moderate business. share will free to of second To strength combined and fiscal all liquidity our And fiscal to demonstrate the to that, of the turn with and strong with position well quarters Joe. call momentum us up,

Joe Dorrego

Thank take happy you, we’d the Community. to Investment now Steve. questions And be from

Operator

Instructions] Ben Your from from ahead. of comes Swinburne the Morgan question Please Stanley. go first [Operator line

Ben Swinburne

administration, morning. and but that with in talk the for Thanks sort the little the really question digit of just we’re curious is about you is business, look lot. on there grow flows Good sort I if about because if business strong inauguration? about is stock, can of And the press like network, of you the maintain aware My a I lot you put strategy post obviously year. reflected even written I’m the think and everybody’s News. FOX outlook all up when you cash stock volume at around network the is control, price. headwind leadership time? think News it you grow in this to of do at Can over the think ask particularly the seems post last of the half you headwinds a FOX Obviously, a that a cutting not business that can a bit the being about? industry mid-single first out been the late, guys cord

Lachlan Murdoch

the Hey, you Lachlan. Thank for Ben; question. it’s

few cut You’re right, we about being trees a lot written and are down. more

to and question. days to let there’s part I’m two think me think I come. it the weeks writing – the – about answer fundamental Look, I in your

parts, I’ll first – broadly but the answer then let and me specifically. both me part Let answer answer

your in success listeners that your throughout or market for News, you or produce the trade. in journals your viewers. your is target work the you market, can the the out of FOX for product center FOX right, and produce journalism a readers throughout do business, that So, possibly opinion What what best is News you you entire history for absolute believe the that, haven’t firmly market And pivoted News. or pivot and has we changed we FOX news best change provide history and of been its we right. is to or the don’t that

to exactly we’ll we the go targeted, with journalism forward, the the hosts, to opinion, is where we’ve we past best cycles. right. pivot the going And our provide further analysis, the where should best further continue So, with with is as we’re obviously we have going throughout be right, as targeted best and center-right been. left. new We best we’re We to not don’t need America believe to don’t believe

far All the of left. competitors to significant our are

where business So, we for the and that’s we’ll the right thing that’s and viewers. for exactly stick are, think and best our we

return that, see in ratings our with Now we dominance. a will

this ratings As is to I cycle, tempered – foreshadowed the we be our where said, and in right. are, after believe last center-right we we the Americas and expected– as call were politics election we

in down We’re – MSNBC CNN go XX% was If I about election, CNN down and the XX% XX%, about XX%. Trump/Clinton ratings. sorry, – back to

MSNBC right. MSNBC XX%, CNN yes, So, – that’s XX%, CNN XX%. sorry,

we’re so, between that metric. right in in And

strength. It’s from go the a news we’ve that to seen cycle on we a we to strength cycle and look We will expected. is this before. forward So, normalizing,

launch, pricing cash, ways. The about second at I think part we business to Business Fox FOX in FOX the of business, about, to we though we’re really your forward. that clear generate think growing, One and looking continue two Channel harder assets, driving this – of News different continue the the untapped. look drive of And question FOX FOXNews.com us with part think and the pricing revenue the out declines digital, Nation, new our we is of and radio, the Media, relatively businesses radio; affiliate digital continue numbers. other that the coming of remains the our FOX of to That’s subscriber FOX announced the I News Weather. of now FOX very We for obviously the past in now FOX power to launch is can volume driving all well ahead sort drive any FOX is quarter

really going at News Thanks, EBITDA look and all Ben. all further will News of that is Media, forward. ecosystem brands FOX we growing contribute are broader when FOX So, growing, cash a to and

Joe Dorrego

Operator, we the to could go question. next

Operator

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

Jessica Reif Ehrlich

on a Thank what that – on give the of for that update is betting. can sports the And much pool to then any conversation finally, upcoming cycle? you. how about be? on you. thinking Can about your options us at you betting and in had options state-by-state, sports your sports part FOX your NFL, impact in talk you your you’re that local can I on the Thank Bet upcoming next the how big intangible? betting negotiations the the – the And topic grow level? multipart quarter And think adoptions station you advertising have topic pool, on continue – do as

Lachlan Murdoch

the definitely Jessica, one Sorry, two repeat questions. multiple? of you just last guess the can I

Jessica Reif Ehrlich

on question sports One betting.

Lachlan Murdoch

Yes.

Jessica Reif Ehrlich

Yes.

betting So, on part How hopefully well. given the mean the presumably progressing assets? conversation, unique your negotiations I sports are NFL, much is of

Lachlan Murdoch

well. to Great. your as voice Thank hear you, Jessica. Nice

group of all, an streaming point station our sports category year-on-year. Entertainment view, and of which second from first of pacing services, sort up strongest two the in really of is is XX% betting. entertainment, is is So, advertising things. is made the One up

of sports in FanDuel I and of a out helping performance as the locally legal in wagering group level. sort wagering and drive States, but at businesses, that a category, for – broken sub-category really is have we’re as sort the local absolutely station of don’t even wagering DraftKings as not also both the we’re as from So, as it but it in wagering participating then but with in obviously, also station very And fronts. top our so FOX at for multiple us. Bet but and option is the on level, you, local sports advertising an action, tier sports obviously front FanDuel. the our betting, our growth the enjoying growth with One, in

million during we ourselves funnel I really We at in very FOX to goal as season The lower Bet. calls over the Bet reach opportunities actually this and active will goal person, Super X of goal. a We is these we’ve X talked a set a the Super FOX goal are NFL X, efficiently. working up million. started set We excited with in X ended about incredibly of – before users. we for the say, top with

tracking launched a actually we in the we’ve people summer. And talked middle for million We’re state. The it’s end achieved option is driving I legal, we season that very football for the our we XX-year licensed increased very but during FOX and think well successful the so was of and is that – at to option where then this of about which funnel before, Michigan, the goal beginning wagering, season. successfully that January launch users, in FanDuel it XX.X% – Bet X.X and the just us XX, a into

June fair Flutter its stake think on based is a of And the I the value, are acquisition market or July. set with which – option were that FanDuel. Fastball in

and in partnership, our And the So, with Flutter. Bet be we deep partnership, will these our FanDuel strategy important continue brand part we alongside of fans our are Duel of FOX with markets. to partnership proponents with enjoying an

in we’ve to we I’m to to you of with is of to conclusion been sure negotiations detail business; important near a I’m the others the growing want to NFL to it’s of a is able that well. understands deals the But sure don’t Jessica. are in – rights, the is into Thank that question, how a to us, continue aware this important NFL, medium-term. We bring to and for for that’s us sort the our be NFL sports the go this wagering, importance and of absolutely, hope to a to as NFL we very while. in the to I As those the our monetize them. business

Joe Dorrego

Operator, we to can next go question. the

Operator

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

Doug Mitchelson

Thanks much. so

I’m curious, Lachlan, question for potential Tubi. partly a jump for profitability So, I but future guess ball. just

advertising talked XX%. are, the up So one that’s up usage question. about the and details The you XXX%

view up than So, XXX%. XX%, more a time revenue of

just there? upside broadcast Tubi in just And AVOD what of on the about pricing your primetime level and you competitive being So, to, I’m CPMs you and where is differentiation. curious obviously future, I’m are see relative talked the platform expanded. curious, now view say, the leading ad

content these is AVOD think exclusive. on up of lot a services I that ends not

do there? of the then you that out what people structure you. $X will for lastly, other platforms margin super interesting. Tubi be attract Tubi you so, just to that when And Thank are would billion hit revenue plus think And AVOD versus ad

Lachlan Murdoch

much, Thank very Doug. you

any let can me if question. the So, in and start jump I’ve part forgotten Steve of

twofold. just to my And of to call I must because really really say, us question that’s of SVOD. competitor not we – we look So, We One, your is lot when billions within will profitable would I can saw direct-to-consumer from AVOD. of the at spend achieve lose we our but ourselves see dollars really we’d you we see why is we’ve we clear, very apart out this competitive AVOD as breakeven two I SVOD if before do words because is stand this about different potential but services, to prefer out hard I’ll embrace or say to our is a We certainly, for dollars. very crowded. to hope We and to many strategy. reasons. it very to Tubi, what and very strategy, in of in with in whether the competitors’ wasn’t or set we very and think Tubi SVOD answer our spent see clear the achieve is strategy early we it billions as this it the chosen to of headline be sure be honestly, and differentiate I’m this win expect that preamble investing in business talking

we country. to time profits, be costs of will We the dollars by losing AVOD win but Tubi or Because in leading in player this AVOD secondly, in and expect able drive expect breakeven. to And those aggressively. to of very our reinvesting the do to billions it other it two things, by in costs programming we be not takes

will in for We ultimately will revenue the billion medium business hit or profitable and one very term become a near-term $X us. the in

that some elements drive digital did lower of high question, on Obviously, sort broadcaster our CPMs allows any other to teens. the the stack than other digital sort and of Steve, miss of The of CPMs part? CPMs; versus they’re further. the us tech think I are And broadcast I

Steve Tomsic

Yes.

question, terms headroom, foot as scale, a six up the growth. continue our the about line half $X other a absolutely neutral to some the in get margin in are. look out the is, line off billion, P&L near-term, to the of so. think right of And in I just change see months, this would that And put in terms gets has a we perspective. margin we of terms see course Doug, the when gas as lot take bottom has been investing target in we for in conversion way in think CPMs look rate. from in of growth, you’d second gotten revenue into over should terms the We invest if where us, you that good initial in over been just going of development expect time of then the to But aren’t the growth a Tubi as near-term, pretty The it to as development business is So, Lachlan where from at fill bottom of obviously. of we to phase that lot there you way we’ve we where the revenue last actually over you back

so, And plenty further headroom to of there’s north. that take still

Joe Dorrego

the to Operator, question. go we can next

Operator

Robert line next ahead. MoffettNathanson. Fishman Please of comes question Your from from the go

Robert Fishman

Good Hi. morning.

be is hybrid of do networks to companies As the you compared media portfolio positioned you to for networks sports its services plus Fox think think leagues, that future about Tubi and a the linear of how using their approach look other SVOD with major negotiations with Sports And partnership on you can and Flutter the a how then role possibly Network to X FanDuel sports outlook discuss Sports use rights? or play top of down, the can NBC FOX for company’s Sports X, a in and note, related shutting you FOX light there?

Lachlan Murdoch

the Sure. Thanks, question. for Robert,

we So, it although for NBC of our X beat year, a as them FOX for competition, announcement down probably positive competition. ever. of suppose, ESPNX net main we Sports shutting Sports, This time and never is NBCSN FOX X. both first year first see for There saw all, the the I an less Sports entire as

some be higher a shows is X our local XX% can and a thing the really win also feel Sports ultimately of sports very I’d time well both very well. Bet also the help of analysis but has. with that FOX schedule COVID which part of last FOX of and sports we of major also and promoting rights Bet The less contribute of rights, with that on Fox Clearly, the platforms their FanDuel. as has focus having the I sports positioned. costs of effort with about also and terms had part being the breadth and also sports can of So, FanDuel. It for you viewing, partnership broadcasting at in obviously reliable important their X with is local I rights FOX which that there and to don’t partners sports DNA the compelling include sort the opinion think think in is you accounted statistic. and sports, its as XX% and our the stations you with Obviously, will always live mix Fox stations engaging and and that amount news and available, sports probably over a opinion programming, with Sports have that

So, Major NFL, the League it’s WWE. obviously Baseball,

not our sports in bouquet are of platforms. other much – on still really going to is sports smaller so and needle great move but And sports focus our the sports so, big that the for smaller

Joe Dorrego

for more one time have we Operator, question.

Operator

Alexia go of Please Okay. That JPMorgan. question comes ahead. from from the Quadrani line

Alexia Quadrani

then positive advertising the had of I its from the also Can coming most elaborate you. You ad on is slight bigger and you declines. outlook, something you nice but kind the back just improvements Tubi you’re made improvement tailwind if very to earlier and comments And platform, some is a can seeing MVPDs or of color an curious recovery? ad on, that that you overall give Thank subscriber on improvements on comments coming circle investments a us some else? and seeing in from I’m the if making market? from on on assume or you are contributions follow-up virtual some from

Lachlan Murdoch

Sure.

to last don’t and as a just that’s of on tremendous. impact never ad first we’ll Alexia, talking we’re see So, political think big, tempted but I in quarter, so we’ve about, discussed, market, be say political true. this the the been has obviously, season I’d

these we’re so finely see Senate I I for years to House think you when two records have and years think a the in balanced, four broken sure. going and

contributed in a Atlanta pretty the and was bonus So, the spending of additional $XX sure with political staggering. station have to. was it million the of I’m the alone not itself. I Georgia revenue sorts about we the Atlanta just runoff, station runoff, Obviously, but which think contributed

the headline political. past the in So, obviously all story, is the quarter,

obviously having terrific take was XXX think great that obviously obviously, comp viewers. had quarter, I the way of a a almost we achievement. rated comps we Bowl the million Bowl, difficult because It and last Super which current and the Super That the by in out. can have Super year, Bowl

negative revenue, even mid – out Bowl the we’re better if maybe the single strip a Super in than little bit that. So, we pacing single-digits,

local year end COVID right. we out stripping mid political X%, and in every down to So we come we for would out quarter, up single-digits from advertisers the where That’s else. improvement stripping have as are a a seen advertising back. if X% we everything and quarter. to Every expect now And tremendous football ago, month, look

where be to to year-on-year. we’d back expect about We’re

we’ll point is leads is in entertainment have I view, strong. the because for our that professional But now in – categories; home, primarily impacted be services, category first course, will still upon question, the quarter Of flip very domestic us, a large side, all on forward, which down. too just automotive, by become the driven, this we manufacturers. think skewed is Jessica’s obviously mention to a that CVOID response I should comparing comps better of a more advertising was I that category’s been looking From being versus to much environment. mentioned the normalized

your By flat. way, roughly second is the spending part auto foreign fact, In question… of

Steve Tomsic

in moderated improvement we’ve a seen think for the sub-decline, continued in sure. months growth just I six seen where look has decline we’ve of actually I what is seen the sub were is of coming. their traditionals, But more a MVPD bit also Alexia, terms we Yes, balance like touch. the virtual ago, if We’ve

from equation. coming sides So, of that both

Joe Dorrego

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

Operator

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

disconnect. now may You

Fox (FOX) 9 Feb 212021 Q2 Earnings call transcript