Fox (FOX) 8 Aug 232023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the FOX Corporation Fourth Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

conference Chief the Ms. Relations turn now over Investor to Officer, I'll Brown. Gabrielle Please go ahead, Ms. Brown.

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

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

then give from questions the community. Steve First, remarks the take Lachlan will and most we'll on prepared some recent quarter, and investment

results. this call results financial may include statements regarding management's statements on Corporation's the operating what could is actual that forward-looking performance stated result FOX current and on identified company's as and note factors today's These from and in based filings. are SEC a Please expectations, certain call of differ

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

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

and thanks everyone release, aspect morning. earnings our every morning's a successes Gabby, closed by us joining business. out fueled this strong we With very of this across fiscal for XXXX, Thanks,

the fourth for Steve cover details record in EBITDA. the While full just a and will moment, year revenue quarter of the annual generated we

Cup, differentiated exceptional our deliver verticals, sports audiences partners strategy renewal FIFA World events led while by advertising across major we growth news distribution cycle. midterm Notably, our Men's to advertising digital at Tubi XX% our also well election, and and results engaged reported our and These revenue growth that of growth like of driving the tentpole across one-third the affiliate Bowl including supported by as FOX's of the distribution growth, demonstrate X% businesses. X%, growth first Super outstanding scale and LVII for as continues

strategy Super LVII was increasing our show platforms. viewership year-over-year. 'XX fiscal onscreen clearly digital most that across of broadcast the was watched FOX's apparent collective networks a The Bowl In of reflection was audience X% TV up time. of throughout world fragmentation and linear all and of FOX's

most US Our season Cup was watched World all watched all match NFL Thanksgiving match time was the of game the and of Men's most US-England Day game the regular time.

maintained and FOX top-rated cable Television. one channel, in Gauge, And it ranks on national a total the News top-rated making cable as streaming debut top front, the entire with by consumption lead five levels of all as ecosystem to network number news consumption equal XX%, the its its the across both made national AVOD as as number the network in well two growing Nielsen's The network. fiscal player XXXX Tubi in cable US a

whether bestowed that or short nothing It expanding service, powered in a awareness Bowl of watched Super content was of spot. was being awards Tubi's library growth. 'XX engagement metrics upon increased and Lions time it's recognized by AVOD growth year total TBT revenue five Cannes spectacular, Nielsen in as the view turn which underpinned America's and most Tubi, fiscal Tubi's by for was

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in look we Tubi to Tubi's Anjali looking new Sud, and To are to Tubi's accelerating further 'XX. very excited revenue that of end, engagement With leadership. 'XX, as fiscal CEO Tubi flourish forward we under position seeing to and strengthen further welcome the are her in fiscal

the and FOX CNN in fourth the as quarter, in network day. cable demo beating the consecutive Channel total in for for maintaining both viewers its total and ended lead total time both ninth ratings continue prime News The At while watch Media, and MSNBC most the network in day most we FOX news the both News as to quarter lead engagement. watched cable

FOX News debuted its tweaked prime time lineup last month.

are fiscal towards our services FOX of We XXXX was bench period results set pleased election. for was position during nearest News' time never lineup will as our continue standard all to with for leadership news double-digit advantages total the are the and in our deep risk. competitors we viewership the where past at in the sustained talent We prime confident the that This of year, even entire transition. initial move year presidential

and XX XX% its since schedule. over over fact, XX FOX lineup the total XX% versus debut viewers up in mid-July June demographic new in to News' is up In prime time the

the Business total and cable as fifth the day business CNBC news network ended consecutive most Network quarter viewers beating quarter. business the the Meanwhile FOX the for during watched

the Special FOX with Chef, one notching the Entertainment, number Toughest at we Test. a solid telecast number Next wins Level the Across multiple number unscripted new new the one Forces: and with had year entertainment series drama of with including Accused World's XXXX one

local cycle. last cycle Our of stations a record presidential just the have midterm TV sales shy was election delivered that

XXXX uncertainty. and macroeconomic are and from We enter peers. itself again a of year We despite of its strength XXXX position fiscal fiscal FOX facing our the differentiated with a where further some pleased very lingering headwinds from industry results delivered effect best-in-class

recent marketplace. offering, our supported distribution from any solid We a ad variable agreements in our by distinguishes for and which environment the next of renew itself unique will upfront the results one-third navigate content

me strategy many is uniquely times, different FOX's You've It's focus our from good. this peers. heard say

that evident FOX our upfront, and sports volume than and news is price across market environment the Nowhere position the both this in leadership live believe year's offerings. in is In led more where current FOX's we proven.

trends quarter. early over signs underlying of it's the have in While improvement last shown ad quarter,

is seeing an and are sports We by largely in scatter uptick driven national solid. news

weeks kicking the football both another early stellar and wrap Big This Tubi, few July. American FOX be year a with September World and at support to momentum Women's Cup the with saw in And before up Ten revenue for NFL. growth as TBT in we in promises further strong advertising in we the off

versus already this continue Netherlands match the television. sporting language break English on to our the We're broadcast FOX watched The ever stage US seeing was We'll European Women's UEFA World soccer championship broadcast. on our with group later live the Women's also US World events Cup records year. first most Cup

we growth also expect of extend local that expect presidential And, our to continue Further, even the our head relaunch will a momentum as further. scale news we will lineup boon we to stations. cycle, course, Tubi's and into which its election be

approximately our debt, net giving in costs. quarter cash best the sheet leverage balance of We this, roughly billion us forget Underpinning year's all legal one-time, balance after with of $X.X ratio this in sheet, business. a remains ended billion we in and even can't robust the which the $X.X

our our assets we delivering We committed position puts mix have us to core as focus our than uniquely thoughtful peers. look are this With relentless manner stronger XXXX. and it a to again, we value in business, a said our time on strength our in disciplined shareholders of time forward for and and

I'll full with you the take of that, turn year. the quarter to to it Steve and over And through details operating

the XX% driven our year's of with company This Fox at revenue midterm when made growth in we LVII, FIFA Super including Cup to with along World by a and the are cycle football. from Thursday generated last comparing broadcast election considerable Tubi. year momentum banner events against was Bowl record-breaking record Men's Thanks, for Advertising delivered across and revenues a were financial the the driving XX% of up night Lachlan, company television by growth morning, results the strong segment, all increase EBITDA. led and X% total more fiscal revenues XXXX good everyone. impressive

in lift We our supporting total fee completed affiliate of distribution approximately one-third this the revenues of our year, company renewals X%.

with From bottom $X.XX in to the the saw which acquired growth increase Total of a previously, line FOX from leading the robust X% impact was other revenues year of Ramsay initial TMZ increase perspective, driver signaled our in X% key renewals segment primarily higher XXXX and fiscal year increase, of subscription As the television an Nation Global to the full billion. revenue company impact full revenues. a EBITDA these Studio X% MarVista, were company-wide this the year-over-year. benefited result along

income to or versus per was or share $X.XX up $X.XX per $X.XX attributable stockholders billion reported XXXX. $X.XX fiscal Net billion share, in

charges other with of Media the the litigation impacted company's associated the by value fair recall, in investment the in may gain with change FOX net and was News you this year As associated Flutter.

net share. this adjusted and non-core year adjusted income to Excluding XX% $X.XX EPS items, per billion with increased $X.XX full impact other XX% to up

modest amount to increase FOX the the Turning with total consistent the advertising prior overall of prior down fiscal largely fiscal FOX impacts expenses. $XXX Entertainment Fox with XXXX. a QX along company $XXX in delivered in $X.XX the our reported to cyclical was This midterm which million fourth revenues Quarterly and election year's was billion businesses the our EBITDA due with from million News quarter and year. on in is results, comparison

in from our declines. direct our when company the June political stations, of result the pricing. as Total the of Media. -- in record the up engagement industry stable pricing at back were year revenues Tubi FOX of with the with renewals response advertising company subscriber affiliate quarter, revenue grew the revenues television The and decreased accelerated primarily we year, XX% benefits of our lower a News our revenues offset which compared of Total partially a impact quarter momentum by was X%, throughout fourth advertising recent at marketplace impact seen along X% fiscal to have June softer quarter last on especially increased

investments essentially Tubi's USFL costs prior year. and was FOX a revenue includes and programming total other at rate of amortization company at the from healthy slower as expansion well Total than production Sports. revenues were a as rights X% Tubi albeit company expenses and the in at unchanged the higher Growth growth

to million per prior was stockholders year the reported million versus attributable $X.XX share up $X.XX Net or quarter. income $XXX or per $XXX in of share the

Flutter. just restructuring described with more the As other the increases along movements by mark-to-market the our of than in were EBITDA costs offset below-the-line investment and

EPS to adjusted non-core to adjusted Excluding items $X.XX XX% quarter increased million income increased $XXX share. per and in net the

other X%. News, revenue to main increased decrease were XX% by affiliate from fell revenues USFL. pricing subscriber on revenues fourth second cable advertising fee year-over-year. segments. of gains led revenues affiliate direct quarterly by revenues the results renewals at X% the Cable declines our a quarter, the season Now than marketplace X% of softer response X% FOX offset Cable back as operating down while in of networks, turning At quarter net approximately of generated more were the saw Cable largely the by our the

Media, Quarterly adjusted with and at EBITDA lower FOX use by costs as revenue led by at associated gathering offset cable USFL. was by News the impacts offset expenses, these were higher partially down partially lower X% digital costs

in growth growth X% quarterly healthy reported to and increase in revenues. pricing continued affiliate was Fox impact X% declines. This segment owned-and-operated a across stations the revenues Television fee outpace by from Our in Fox-affiliated subscriber led Television with

Television a advertising growth political ratings of the market off-cycle by and as at the and in was revenues at rebound slower fell Tubi base strong lower Entertainment. FOX X% the stations FOX Television offset lower revenues

higher at was quarter, offset revenue the higher expenses activity revenues rate EBITDA adjusted companies. grew however remained primarily other improved outpaced result Television our X% prior as at rights costs compared of Costs this programming deliver at we also Television quarter. at increase FOX increased prior entertainment and was of higher amortization our to were the in than Tubi quarter segment production had a production year the flat revenues to by Sports. by in the EBITDA growth the where the year in Quarterly

full provided inclusive the payments. less we by which CapEx as operating of generated free cash legal define net During billion activities cash of settlement we $X.X flow, year,

and some XXXX. to fiscal for get key we capital items Before balance noting sheet, is worth allocation it

year We and as of the XXXX the events Super comparing rights our will to the be of UEFA first midterm NFL cycle, course European and the transitioning as broadcasting renewal Championship. first of our Bowl fiscal election marquee to including well

fiscal net At the income. to renewals improve margins reflecting of networks, sports XXXX expect we cable our to college rights sports sublicensing approach in disciplined

revenue no predictions on we affiliate subscriber of terms In industry make volumes.

segment. company total benefit we of renewal However, towards and see of another our year the the previously those skewed towards this indicated we've for Television expect and the to third revenues up renewals as back distribution half our have of year

expect our in initiatives. We continue to growth to invest

line focus Here EBITDA with to be expected fiscal in Tubi than spend will better the deliver investment portfolio collective XXXX. the or of

year. provision taxes expect perspective, tax tax to subject our from flow corporate this but will likely cash fiscal cash near-term. the alternative we And not new will be impact in minimum a the will Fox elevate beginning This our P&L

time. over tax still of realize we full However, to asset expect benefit our the cash

Returning allocation. to capital

of cash billion announced shares A Over previously XX repurchase of we returned X.X the million the $X B Class accelerated XXXX, This share through $X Class includes impact of capital fiscal billion million shares. the course our repurchase of transaction. and

by continued This supplemented in the per an we share. buyback today million activity commitment increase $X.XX And payments announced $XXX semiannual shareholder was our to in in year. dividend over returns, dividend underlining our to

in outstanding since supported as quarter we This payment over buyback returned including With over cash billion XX% balance in to the debt. spin our representing dividend, of sheet, with launch $X the repurchases total the by this will billion ASR, This our shareholders the includes of share XXXX. $X.X over the of capital where billion of Lachlan XXXX. billion all the in in and November cumulatively strength of ended shares program $X.X we mentioned is have of our approximately since the $X.X

That of in and commitment focus our year as investment. pursue the another combined industry strategic returns Fox. to with balance supports value was XXXX to the ongoing accretive well strong as most flexibility at robust execution Fiscal capital sheet

let's that, to with the call And Q&A. back started turn with to get Gabby

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

comes question go of the from first Phil Your JPMorgan. line from Instructions] Please Cusick ahead. [Operator

quick guys. if can. A couple ones, I of Hi,

First, for ESPN about partners. talking looking

a digital? alternatively run or us And just investment league -- can sports-centric for on And Given a you. competitor a update the Thank ad then second, demand and linear into issues? overall your versus in portfolio legal could peer of including sports makes environment any rights, JV you sense would give for FOX?

for questions. Thanks morning. the good Hi, Phil. Hi,

the similar FOX Sports regards, very sports of and our I as is portfolio any fundamentally think sort direct-to-consumer and our -- ESPN's. proposition business So to

at portfolio. at similar strategic forward, -- And looking as face doing we so, our the priorities same with do they paths we looking go probably as and forward

tremendous of and drives the place our wherever really At that and most we the universe. and to it to pay-TV ecosystem, value content, traditional consumers, drives sports being value continues content satellite for businesses for from that of we time pay-TV content The Sports we and a our come. protect value long and front put foremost thing first the of is, FOX a that be cable will that paywall, think within And and really the moment, can. to behind premium in premium

our it's it most to It's a universe, whichever manner, as remains pay said those those change, and consumer our front important content don't that, brands. brands phase not consumers that to moment, -- are a pay-TV quickly Having provided we in endeavor rights demands say, an you'll a put both transition consumer a either-or enter a behind them, you of change, we and leave proposition. universe for not But to tastes in we wall and direct-to-consumer a when the get it's important. we sense very where envision will for makes and full value think

other, positioned but in any choosing or the mechanism. choose the might one not be ultimately, You're we'll consumer one distribution between the other or between or well

legal on give very from advertising But in investors update, of environment. your having a a platform. you AM the perspective. I So in -- on question advertising I with can can't ramifications, an broader the pleased as upfront our answer We're national league

at and Our volume, were across news about very the Tubi, upfront able both year. quarter tremendous and our of We all growth you've past results, categories drive obviously, key And fact heard pleasing. and in pricing sports. to were this

quarters of And very last local comparison with got Health, in slightly if really the by pharmaceuticals. we're in strong. know pacing From year. and about pacing, strong. very talked with retail up. digital look at local Financial strong that some like past very of a obviously, ex-political That very to categories was we've flat year, auto Ex-political, in Categories positive impacted political the local were us auto includes but we've national revenues. strong perspective, -- travel category those in a we wagering. you a sort softness similar year-on-year offset for strong telecom, for as in was our service August upfront, the national mobiles, remaining upfront

we and think going second with pleased So where are calendar we overall, a half half. we're decent to have we're -- second pretty very

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

you. Thank

moving returning strongest aside, depressed your commented remarks, litigation Just you've assets know, a it have little give the there I at at in bit balance like multiples. seems us prepared you sheet. to point, back the Can assets process this you your possible, of do sheet. but more balance you interesting attractive really attractive And And -- feels rethinking, thought it step-up are in you – entertainment, about in spend terms content years? are shareholders? content, the what or content you, overall entertainment to is or it you with on the overall to then both just capital areas spend spending are sports but of NFL, really down what up how mentioned you're like on coming

Thanks very much, Jessica.

can sheet sheet the think forward how we shareholders, capital in, to business. On chime with I repurchases. to we the or that agree dividends tremendous continue the wholeheartedly, balance us balance you flexibility both in but gives It best it's share return and whether in have moving we through Steve

M&A shares $X mentioned landscape, think past probably we this particularly we in our because opportunities the attention. an see as year. I worth didn't mean of elevated look I we year across remarks, that level repurchased Steve That's his this caught any billion past attractive

the businesses view word drive – in best of are portfolio of value. we a dispassionate We attractive sort the that fit shareholder the But kind of for that with terms looking to will this business. be for our always what's long-term going businesses take what's growth – dispassion

capital and a of pretty basis. of much sort opportunities return daily on up we So value balance accretive

anything do that? Steve, to add So want you to

assembled think that the just Lachlan. we'll the us everything at flexibility shareholders. on I and ultimately content exactly Jessica spend do balance to The value ultimately we've that's right, look delivers what No, sheet gives for best Yes. question. your

bit year-on-year don't you expect spend is increase. the the sports running heavily that business. look have increasing change through the amortization through We've – fact is But costs. we costs influenced year a amortization rights our to content Next sort of if line of content we that, a would Super got by the Bowl of of

invest going from then steady, the entertainment will linear It holds strike. down, at a continue normalize content to perspective to strike. for Tubi. probably the we're The if probably be business given you But in

Some also be share of costs in terms content. in licensing of we'll growth active revenue production as growth payments passive use is of the relatively continued but and low spend form but in that in increased of and sort a

hopefully, gives you So that there. color enough

please. question, next Operator,

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

Thanks.

You guys down that announced FOX recently winding you'll Bet. be

ones. So three I quick guess

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question please. next Operator

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

a still strategy see particularly, side Tubi? a guys of, can programming Lachlan from that you about bit about know mode? the do apologize the impact whether in EBITDA you Thank if that And was over guys Is profitable? Tubi, Big investment more Like Ten to Thanks. any you when that's now? have evolving of, the already have quickly morning. the the expansion but turning see if I Good notable I talked talk could talk as if don't product it curious with the period? around going on think that little a sort long-term Ten the just you multiyear additional sense how I you --I Big go about you Big into becomes season And XX you. financial impact as the

Thanks, fresh fresh X – and she forward with and to CEO, Look the you'll it Anjali I'm her September first business. incoming adding starts find her looking on expertise obviously, sure eyes Ben. and obviously Tubi experience opportunities. we're see with to the any And

If growth at really business everything. you tremendously It's look TBT been and the the strongly. has rapidly Tubi today, grown

then that's then and done what revenue. And continues revenue. at to a opportunities growth that's pace advertising driven TBT obviously is faster than grow

fill growth, more advertising at can driven we place the viewership growth. see you opportunities not by is actually clients' which pace to really up rates keeping with because that's thing, the moment good a So and than actually fill there's TBT to our strong

the across on is if for say market think platform. look key also one with of growth on-demand an I AVOD the I it's you and Tubi, I that time, primarily viewership should the built think differentiators over

actively viewers our proactively -- clicking So on content to are watch.

might watching just and is fast fast from channel engaged they're know different know, it and leave then room in an in This we a plays background. content. and place channel There's channels. auto the for we front so and their the And a that they're absolute someone very where on screens in of it tune

movie grow. continues Tubi watch think that that of to TV has those of viewing service fast But proactively us show. clicking to coming people And XX% video-on-demand movies his within library TV or content and a it. is from actually that shows channel and I the to on

this individual to now titles we movies to of enjoy. think and I We equates shows last had XX,XXX which consumers TV XXX,XXX quarter, titles. XX,XXX our have for hours time roughly

So that will continue.

one other to looking categories the verticals ones that think low-hanging and the to continue categories areas that monetize. to there's certain we -- are some of sort at content expanding fruit super of want continue EBITDA you that There's we'll we're we is be that the Steve, to can talk strong I to in. investment? serving and do

Sure. Yeah.

if Ben, not opening you So caught it in remarks. I'm the sure,

better terms to we negative million. In in similar were actually of was sort investment better in Tubi fiscal which had year for the XXXX. full range, the of we low mid it where the quarter XXX nearly we is by to were The $XX

the business, that we it portfolio. the momentum, we're to in As in what seeing we And continue whether of light look to digital our what in to in already behooves be July, XXXX invest Tubi's an absolute shining just us QX seeing sort from we're our saw portfolio growth it given business.

XXXX, to we going but nation investment broader expect as bit that weather offset level sort growth in things back look be portfolio fiscal see And so you investment. same should or into USFL more the terms even by will of of a coming like at a the net bit

continue -- very convinced pretty So were going to maintain Tubi position to of leadership so and our excited sort we're we there. but of

additions only look, is partnership strengthen Ten just our coming conference, these Ten FOX regards think and as just the a franchise partnership finally University will call the on in and the Big football of Washington to Sports, into Big our Network. it University And it Oregon we across Ten of Big particularly but

us for across think positive very it's So we board. the

more Operator, we question. have time for one

question Robert MoffettNathanson. from Fishman go That of comes line Okay. from Please the ahead.

Thank how you this And affiliate despite seeing can and you. about continuing grow elevated is your its backdrop, about think After news can cutting? today? help negotiating fees of you confidence levels the Fox's with some relationship evening. talk CBS affiliates the about of affiliates vMVPDs just to Good the this year with cord with earlier us with if

you very Thank Robert. much,

up So very issues have look, we affiliates they understand we -- them regularly. strong. same all catch station facing in television. -- our headwinds with the And see And We is we're the right group without relation that broadcast with our have.

So in the the business. we're the simpatico headwinds in with them that of risk and opportunities both

-- And word pay- of exclusive put we've our distribution our what's the for our for our keep and the TV distribution that them We take partners. are our protected also fact We the We franchises affiliates, environment, proud our NFL for vocal to sports and or we key very most in think games -- distribution across because else. partners. but certainly important don't them or pretty anywhere any that's And sort universe. I continue a the free drive subscriber I both the will universe. well subscribers universe pricing pricing, reduction able continue and understood in to erosion balance that, be pay will industry-leading to that And ameliorate of think received. of and

So, think, that's feel place are we where we're our with in good them. a affiliates. I And we pretty for

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

Thank you.

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

You now may disconnect.