Fox (FOX) 2 Nov 232024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Fox Corporation's First Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabriele Brown. Please go ahead, Ms. Brown.

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

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

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

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

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

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

Thank note you, start and thanks, comment this us a with want joining a I for just thanks. morning. to Gabby, of everyone, and

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deliver today's off a active Now financial comparing Fox's first solid distinguish continues that started a itself news Financially, events 'XX of the delivered fiscal has of and this on to and ahead assets turning slightly focused are earnings record. then EBITDA. revenues revenues of record portfolio results. comparison, release. and exceptional robust this a backdrop we now last sports cycle cycle XXXX Despite footing. to operational of posted year's against total year an quarter schedule, and we fiscal Against

On the quarter. affiliate side, the X% the total segment TV by affiliate we growth of led in reported growth, X%

quarter and have we brands renewals, Importantly, much to by principally the the stations. to value ad due our Advertising our decreased for revenues reinforce program. in heavier constructive which last X%, in deliver our around TV comparative local a continued was quarter secure that partners revenues at and of year political

national in pricing We in understand on to advertising focus around healthy deliver inconsistency and entertainment, live news particularly but to and the core market, there viewing is total Underpinning quarter. broader sports with this. continues shows our demand X% in of continued FOX our data up consumption revenue the Tubi. momentum brands, the clearly resonate at and consistently viewers With are brands with addition which

the From language Women's to of on versus watched most driver television. FOX was the was Women's U.S. with U.S. the on Cup, consumption, Cup the big improve XX is strength gained. to from fall, are schedule, by to Thanksgiving game that Netherlands that Christmas, of a football Based led Sports remaining FOX we summer packages especially English where our match World on our its World broadcast over ever expect Tubi we million on engagement our by of lineup especially bolstered NFL FOX, the viewers significantly. the averaging

Football, the At XX% driven is Saturday million in year delivering XX% game view progressing College by revenue a to another had all reaching lift an window new growth third Tubi, as interest time. we quarter, straight X new averaging in In #X viewers. almost enviable big Fox's of highs is total college footfall, impressive

remains nearly Tubi and monthly users streaming service AVOD the of in September, United active calendar surpassed XX million in year player billion half ad-supported the free TV watched the States. most logged streaming hours X first #X in and the

XXX,XXX TV Pluto, exceeds than Max, now introduced during translates reason the for Bouton approximately beaten consecutive movies Additionally, content which GPT to the and Tubi into library engine incredible its Peacock high extensive Rabbit X for months. AI And range navigate and recommendation titles. channels. Tubi powered Chat fast XXX XX,XXX level and a is users Tubi Paramount titles, One has engagement that Plus to more episodes of X addition help this in quarter, that

also proposition offers and Tubi unique a to compelling advertisers.

Tubi And to other young the populations. growth with saw diverse study audiences amongst Tubi Tubi on of high-value recent new unreachable streaming that concluded AVOD streamers services. is that Our fastest and net of XX% MRI top able deliver peers

our lineup or Now Middle financial first leadership in the but choice. finishing the Whether XXXX markets, of and is in conflict is to linear expanded new in and the mid-July of all viewers both only cable network total in most cable The Fox not launch election position, reach is Primetime news, as quarter the the of news News, turning cable, the cycle solidified Fox our day volatility our further in watched back their News' Primetime. increasingly News audio East, it and in content the unmatched. the overall strength of FOX digital coverage upcoming

for beating total prime viewers and as network, most in both and the FOX total news lead its MSNBC watched News day. demo CNN in cable and the and maintained

viewership platform. XX% first in the current they over from increasing the across We with have that demo. October during seen in over continue leadership and quarter XX% the was expand achieved the Ratings quarter, quarter growth with key the

with were PX+, the X In the demo. led within channel X viewers, X followed in News X of Watters a and for Primetime Jesse business demo. top during terms the of and Business the quarter had business News Jesse watched sixth consecutive PX+ programs network, total most Hannity day Fox Hannity, Watters programs Fox ended the Gutfeld. way The the in the the beating programs cable by top viewers And the news cable CNBC top as X the the Primetime in And quarter.

telecasts, successful the and The primary election telecast day off Fox year the which debate, XXXX presidential started with highest-rated the election channel's highest-rated News of cycle non-sports cable. is across since Republican

from will we election coming the kicked political While the get local benefit it, in into the increased spend off greatly once cycle, our quarters. deeper station debate group

and ranks Entertainment, the XXXX entertainment FOX as and #X at started top network in adult to broadcast the Fox Over the XXXX we to the season XX network program. XX demo, as key

election up. continued nicely. now and heats We and college Fox the across of in highest-rated enthusiasm to Krapopolis, at XX FOX game X momentum football shaping Tubi Masked XXXX/'XX look And the date underpinned with Across the World forward and to is News fiscal First Snake completed least season, new Singer. years. a in up 'XX company, Oil. premieres and show sports the top #X the renewed at stations the growth cycle Series, at viewing the season by The the has our local X as the great Simpson of season's NFL fall

we FOX disciplined asset it value that shareholders. in Our balance and will manner to and continue for sheet thoughtful a remains delivers core our deploy for a

details the continue will be in to I and you years Fox. involved operating Finally, come. a father turn much to felt His it XX-year legacy can to enduring congratulate the very to still take that over my be News both that, Corp is quarter. would can I'll companies. like I With these and he to on And career for you Steve at through assure of of

is more revenues everyone. Thanks, billion, a total the record Lachlan, affiliate This slightly at declines. as we, first fee $X.XX advertising from last revenues midterm impact increase company quarter. subscriber local From by the quarter year and above was comparison good course, industry prior to revenues year's led than from reported distribution renewals gains morning, our pricing political of in tough the faced X% an offset stations. the which FOX perspective, of recent

direct World more offset of continued the benefits continued marketplace than support FIFA the pricing we from of softness with the national Cup, broadcast the News Tubi response content. Women's live and revenue generated XX% coupled This, at the FOX saw at for in growth

quarter and at our amortization higher Expenses by with the as declined $X was Taking NFL expenses quarter. X% Meanwhile, as first advertising associated total the driven prior Women's renewal $XXX adjusted to our Cup, $X.XX this businesses. the EBITDA costs X%. our compared digital company a year production and increased increased year whole, in billion the increased from step-up revenues World rights rights million million. revenues other Quarterly reported or

million recognized to share per $X.XX attributable company's reflects year fair prior the reported value $XXX $X.XX other in or period. I compared the of the stockholders income just in of impact $XXX the Net or mentioned, million largely This per move EBITDA with along change to in in share the net. investment Flat

other impact non-core $X.XX this Excluding versus adjusted and items, EPS year's $X.XX. last was

at midterm timing the growth of the industry results, World declines. continued offset Advertising revenues football TV total than increase across healthy X% X%, by broadcast driven in last segment segment by by more FOX-affiliated fees This Cup, political our subscriber we Tubi affiliate Turning of TV and year-over-year. X% of and with benefits stations at of increase quarterly to year's college $X.XX from with FOX lower the revenues revenues delivered television, where the from led impact ratings partially broadcast, grew in a our billion the an starting of or operating Women's offset network. absence was the growth the revenues all

increased a rights associated Television revenue to tied Other in compared Tubi. of our our growth the investment million timing Together, of result to expenses, costs in offset and first the $XXX prior participations year to year television production and the in step-up reported initiatives. quarter, the $XXX at more million quarterly than EBITDA adjusted led NFL expense these XX% with primarily Television in the revenues revenue Cup, a the increase of of with continued segment renewal X% World segment at was including our by The the associated Women's our entertainment quarter. impacts in

decrease $X.XX year-over-year. reported of segment Our revenues X% a Cable quarterly billion, total

quarter, of declines, revenues range. affiliate the advertising World a X% Cup were Gold broadcast subscriber were continued linear in the CONCACAF in Cable Media. digital which and a by demand we impact softer ratings more response marketplace continue News Fox Notably offset at healthy advertisers Media. and from FOX the of national revenues lower largely though, Cup the of News as down run Men's than see a were direct to Women's continue X% result to the down Cable X% industry and of

Cable other FOX the higher rights portfolio. amortization revenues and broadcast timing the sublicensing and increased by in led production costs rights the for at Cup, Meanwhile, football at across due timing contractual Women's Cable segment to sports increased our Sports of revenues. the of college quarter by our $X million Gold One increases and expenses Cup World XX%, sports programming

in million EBITDA in compared all, the this $XXX to the Cable prior $XXX resulted adjusted of segment our in All at year reported period. million

receivables, quarter. cash and the flow, working by a in consistent $XX the which where with fiscal capital rights year. the define provided the the reversed as our with for flow, in of to seasonality second of less of half net buildup first both fiscal by This payments CapEx, free half activities was is operating Turning year our we characterized negative of concentration cash cycle advertising-related cash million sports is our of of which

a share our deployment further a $XXX perspective, million From have buyback through fiscal repurchased year-to-date, capital program. we

XX% in full since approximately our authorization $X have balance the and supported billion. to strength This total billion, program of billion representing $X.X of committed ended We by outstanding, the sheet, we the is debt. cumulatively launch repurchased now quarter where X.X billion XXXX, we shares our $X.X buyback the of with in cash approximately in and buyback of remain our utilizing

the notes senior pay to the use over October. that call from in intend This Gabby. XXXX. back issued to The in that, with excludes early which January And we the to maturity coming we of $X.XX turn billion proceeds I'll due corresponding down

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

And for moment [Operator Fishman Instructions] One Robert MoffettNathanson. from that question. come will from first

ROI the negotiation, of any more broadly, fee on deciding discuss, renewal forward? renewal, sports just you expect on industry fee or on Disney, in can affiliate growth you impacts right Charter the higher future WWE on you advertising to then you of After anything how going rate can if and cutting revenue? whether see the specific impact the deal share affiliate And of driving passing evaluated the the maybe context cord

there. Rob, lot a in there's

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on made we've the view, way. the to significant same We us them. all we the return before, were enough -- accept. new either, -- for and make would WWE our partner think advertising We to from we the So been we many analyst renewal, levels are on point great we for our of of but how all we that attribute retransmission portfolio in move not I to in -- at we didn't WWE talked new base look investment to revenue this of so way the same to be of advertising how a it opportunities But for an for about hitting due analysis, numbers, WWE the rights, sense sorry. the and on on both return the sports rights on They've audience above also years. analyze

simply, just very But pretty quite disciplined didn't meet the disciplined our RR and parameters. we're

on We're from ROI in, been for we NASCAR final them. a currently It's to We and from our for very with NASCAR of we've partnership many NASCAR. an status forward constructive negotiation years. view. renewal. them the a think, of obviously, look expectations that point And partnership great So continuing exceeds our wish luck moved I

Charter In terms going and Disney that view how of affects and forward. our

for positive net a it's think I us.

them to to that to invest we want do We distributors our think high-quality high-quality want brands. in continue well. and programming, I

Charter station between FOX Sports, focused, our very obviously, our as Fox value. have of And a set valuable and and core brands, network, group News distributors we very that such

deal been the for for us has positive net-net, Charter So our positive Disney, and strategy.

is Swinburne question Morgan next from Ben Stanley. The from

although to to ask be of it guess question might about value, X immediately pieces sports -- connected, Tubi. and wanted confession. have spend My is I it's a one first unlocking on sort that does I

college on particularly So particularly on football, arguably, higher. capitalizing maximizing those you if sports, your never of probably are and have more more probably than the rights I'm the wondering been rights. college and even football popularity return guys today ever. mean has valuable just ideas I

about Beyond the retrans the kind on of advertising think stuff we and live always fees. was rights

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fine. that's No

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But Sports through Sports advertisers through college it's in brands been station distribution. perhaps certainly, not brand ultimately, build and underpriced obviously, we're the our past But opportunity and we leader. the and I'm years, sure. recognizing football Fox in the and Fox And are value

way. it to football Sports Fox value brand build Tubi. with And the monetizing through same thing that through and so continue The college we'll

all, envisage their we focused users, the entertainment, any future. frankly, content near makes very of entertainment, sports kind But live video-on-demand long-term Tubi on all even of perhaps in the significant valuable. engagement with don't First on then or particularly that in and more median, is which and primarily Tubi

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primarily how entertainment way business our with Tubi. a part of the be engage of value core of our core part engage future. -- and terms in the Tubi strategy. we audiences a In unlock our in the will It's

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So thank Ben. you,

from Ehrlich Reif Jessica from America Securities. that's And of Bank

say, father, I your I part -- all from But I is of question, kind. a of guess, want as usual to us. news your X definitely and about appreciate introductory all, was my reporting course, one comments of really who First X of regarding

advertising, for know political the advertising general you the give sports tone still We seems and on us marketing pretty can First of is. advertising tepid. what your current outlook

on about longer-term it's the maybe is how are And what to universe? then kind the of thinking nuance possibly term, about vehicle transitioning it? think but you but Tubi, the clear this as growth the tremendous a asked, given near streaming, there's you vision Or in Ben for like decline just

So let with me start advertising.

So word sort I market understand we the hear right, and appears the be of -- advertising unsettled. use that or the mixed, also to

However, news. focus our extent on due and the we to seeing to sports not that same are

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that's that be how So could combos.

so we'd it more season said sort of for congratulate And would Texas winning have like more I national Having the a around bit seen and what have we and series. to should that, is. these we to games seen a Rangers it is great world like but the excitement think games,

have Media, hour important is At that we FOX in pricing. XX over our advertisers p.m. it's specifically national to X with advertising quarter. national growing in the first new note in News solid Primetime And

refreshing the oversupply from from the from and lineup very really sort where pressure which downward technically previous put upfront, really for and there our Response direct of of but our in well. from year So last ratings also an a schedule advertising Direct worked market on has some perspective, pricing. the response both headwinds really, to face perspective an created continues was

be will of We would for increased relieved. due that ratings from pressure and incredible we've be that's but expect is as go There -- of to view, offset to level increased got some partially preemptions the really our cycle, reported. by new of kind a we audiences to due positive which an forward point a in-depth and

overall, of verticals happy performance just overall with of I are those both should our in we So very business. news, and sports overall the

had We is driven very happy also off revenue We're we view gains, XX% in time. with announced total well which growth the Tubi. XX%

Tubi time. immune it's softness incredible Anjali monetize is audience. we how effectively and is from better now the advertising audience forward, efficiently written is that. and we Anjali viewership, more that market But not that I is and really on this in what monetize. view think we see focused And on how in softness. We've growth focus on huge time, focused in we'll very there continued and going entertainment growth

greater from take the audience to We've growth start wallet to of earned because the advertising really our share right partners. of a

Finally, the stations. local

market, pacing exclude base We last ahead are year slightly if political. of in the you

in have month I million remember, of October, over alone. the this You to $XXX October particularly, political year had of quarter last worth it revenue of think

base is year-on-year market a huge very it's we're with So But the comparison. strong. ex-political, pleased

services. right? that's That's are And It's lot of recently, movie the strike wager auto -- retail there's and There's and Hollywood. strong, a no offset the also with by they also bedding, not [indiscernible] entertainment, financial launches. really in very led categories

So services. in auto, that's the and financial offsetting some retail growth of

on Now X strategy That's of the to -- what go we of question, one. of in for think your questions multipronged your I have longer-term some taking the happens other should I a sort Jessica. strategy. so in too ask the Tubi. But -- when long, part Look, you

leading entirely is I think obviously, It's audiences. and free. in by It's Tubi clients the It's all by an AVOD That's our It's of enviable position. advertising-driven. our focused. appreciated player.

a with a incredible driving an move founding and be transition founder our the Farid, always who for couldn't I new to from who and entrepreneur, -- building It's And deserves transition, happier to-date. when Tubi all is from to credit difficult you leadership.

days, on it strategy early not it's Tubi levels. to -- it space. focused does our all that free Direct-to-consumer AVOD and something closely. streaming look at has Anjali's service opportunities we it's But issues far, our is continue the only streaming to obviously not that of in very the but is the in impressive all So Tubi front at grow that

Jessica. small those sports. a of direct-to-consumer Nation, most service have questions, services potentially have in Fox hope expanding news and we and into optionality answered SVOD I your further I of We

question UBS. The from from next John Hodulik is

in, just that January. would had process? more be think but I get in weighted the we said of a update affiliate the can new an TV First, renewal agreements you the on think kick I on side, lot it guys

on just see So any there. color we should trends the

Nation, I but And very in the seeing than be of we're what then platform. to don't the rest the you or different in talked have long-tail networks somewhat renewal, Charter, you it's any unique Disney to getting about back that Lockwood, obviously would really a you guys major say, SVOD industry. Fox seem

Fox is adopted out it model on broadly this seen this would that renewal implications be thoughts any of we've the Just industry. time the for over and for

main Also, going our and distribution look, focus the on -- due frankly, talk Pay our or on forward, our depending really most let I -- on to affiliate renewal, their me FOX Thanks, the John. picture of a to with Steve focus wanting strategy, stream. thing or is numbers the to we good focus because start distribution but and any core remains can with our our affiliate Cable renewal TV important the big not think revenue our from partners distributors the brands. Cable on and succeed, bundle, largest businesses being perspective, On really

And that remain it that we years believe will come. for largest our to

So the is of we one within feel are reason, our -- as want our bundle. distribution kept why we partners success and premium the We well. success is our them we well, want them which succeed to do content we've to cable

We I are moving be, a our That away us for distribution them. and in premium stage, cable not interested for partners. mistake would from at content think, this

distribution And we our our Sports And a distribution partnerships are our increases with contracts. partners our by that they affiliate we've stations a that been And distribution have so Fox because and ago, our they rewarded value they call plan. line to networks. number quarter in partners, agreements Fox brands, with local our value our fit last and and our rate due that, that obviously, every that's case, -- in since with absolutely News, focus, renewed of by value rewarded

say people their we're to changes seen the lot me that with have And -- for very to are a don't we our work people of -- haven't hard about are way constructively renewals, -- partners. with pace I pleased and It's part our calls to of any want Disney. and earnings Charter So talk goes of next the to to other able second how week. with question your we

talk not I channels the that space. particularly affects think renewal the and us early we're how because that for we're in them cycle. entertainment can about media in They

net is a terms the brands, it's the to so as on positive. think might retransmission audiences and and popular. where where be like channels We core of less the that in partners focus not frankly, our on core leverage I brands, see the all

Steve, do you So want to...

Yes.

this renewals, we're of all to X/X our -- due through just John, Lachlan's had just we distribution over and fiscal reinforce year, So of point, virtually that.

renewals, -- happy fact and renewals. objectives we've gone the that's that back achieved as a, pricing achieve and any that assuming which with those been So distributors those are to, our we've Lachlan mentioned, fact the goes objectives. the And haven't also we distributors able to against

a to goes constructive It relationship.

We those have with distributors.

And the so, full new a impact I listen And expect those benefit should year, progress on expect see see you portfolio skewed see cable to say. of our the year, should new the some Television and I the of into that be suspect I the will as calendar you'll those bundle. towards calendar to that we in you should renewals, negotiate also side think coming but segment, the

question that And will Phil JPMorgan. Cusick the from come of line from

Tubi, on has shift those comments but of do think lot which just we've linear the Lachlan, of it the asked, the decline? to been DR benefit to your hopefully advertising A digital. recognizing some and video allows have tipping about point a where But your cyclical upfront fade. that view makes issues thinking reached is on video landscape from you you you secular, But not it future me curious ad about linear

you to, look I clients. to, our deliver it we in reach there's if no is of break have really advertising by The of sort category, right? up sports and got those short so sign And news, and a platforms demand ,we unique slowdown incredible think, that for answer the at

upfront. a competitors, the really didn't -- oversupply was some past of on our before think there to last, we is -- the a negotiating we And relates upfront direct an strategy and this of see of in same due DR specific to issue that's I down. the in see the there market, response we're -- activity was that issue pricing driven

DR in the we so coming And expect or ameliorate pricing the out on to wash quarters. pressure

a So at see all. a and we as shorter-term problem do structural that not problem

that sports, is back so platform or there other offer. categories And offers it no reach the in to those that comes news and particularly content

we And are so a strong optimistic is not enough word.

can We brand and are offer our deliver we we the future audiences advertising, deliver that you the also the of very and when the safety with in can brands confident clients. linear that

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

you, Thank you. Thank everyone.

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

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