Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Third Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Lachlan Murdoch :

Thank you, Gabby, and thanks, everyone, for joining us this morning. This quarter, FOX continued to distinguish itself from its peers delivering 7% EBITDA growth and demonstrating again the strength of our brands and the advantages of our strategy. This result is even more impressive when considering we are comping to last year's third quarter, which enjoyed a significant tailwind from Super Bowl 57. In the fiscal third quarter, total affiliate revenue fees grew 4% with positive growth at both our Television and Cable segments, driven by pricing benefits from our recent renewals. Headline advertising revenues were down during the quarter as expected, due to the absence of the Super Bowl and fewer NFL broadcast than in the prior year. If not for the difference in our NFL postseason schedule, our total advertising revenues would have increased a few percent. Overall, advertising trends at FOX are clearly moving in the right direction, both in the scatter market and in early upfront discussions. Demand for sports remains robust, while trends at FOX News are improving across the board, including the fact that we have now fully lapped the direct response market issue that had adversely impacted FOX News PR revenues. And while there wasn't much of a primary season this year, we do expect strong political advertising for national and local races as well as local ballot issues in the first half of our fiscal '25 which would largely benefit our station group. As we look to our annual upfront presentation next week, our focus on live content and must-watch events, such as the coming presidential election cycle and next year's Super Bowl combined with Tobi's position as the most watched free TV and movie streaming service will favor our enviable position with advertisers across the FOX portfolio. Operationally, FOX News again ended the third quarter as the most watched cable network in total day and primetime. FOX News also strengthened its leadership position inside the category gaining share again, commands 50% of total debuting. These gains are underpinned by a dedicated team of journalists and staff who are focused on delivering coverage and insights on current events most relevant to our viewers. Building from our strength in primetime, we are expanding our leadership across day parts, whether that be mornings with FOX & Friends, afternoons with The Five or late nights with Gutfeld. And we expect this momentum to continue as we ramp action coverage heading into the fall. Tubi ended the third quarter with 22% revenue growth driven by a 36% increase in total view time and 20% growth in monthly active users to just under 80 million MAUs. Our expansive content library and our differentiated user base have solidified Tubi's position as the most watched free TV and movie streaming service in the U.S. with 1.6% of total TV viewing, ahead of Peacock, MAX, The Roku Channel, Paramount+ and Pluto TV and only marginally behind Disney+. Paramount's debut on the Nielsen Gauge in February of '23 to the most recent gauge in March of '24 to be share of total U.S. TV view time grew 60%, which is faster than any other streaming service over that same period of time. Apart from just its growing scale to be also unique and uniquely valuable to advertisers through its reach and through its engagement. Over 60% of Tubi users are classified as cord cutters or cord nevers and 90% of those user time watching is proactively on demand as opposed to passively watching a fast channel. This positions to be very well as an important part of the growing digital streaming advertising marketplace. We look forward to showcasing Tubi's strengths at next week's upfront. FOX Sports had an impressive quarter with strength across all areas of our portfolio. We finished the 30th anniversary of the NFL on FOX on a high note with 3 NFC playoff games on FOX averaging an incredible 45 million viewers. This was capped with the NFC Championship game growing over 56 million viewers, which is 19% higher than last year's NFC Championship game and the most watched in over a decade. This season also reinforced FOX solid position in collar sports with strong viewers from both college football and college basketball. In fact, in the current academic year, FOX are the most watched college football, Men's College Basketball and women's college basketball games across the regular season. College Sports has grown to become the second biggest source of FOX viewership behind only the NFL. Total consumption of college sports on FOX has grown by over 40% through the last five years. And in the March quarter, we launched the UFL, United Football League, the result of the merger of the USFL and XFL. With this merger, the outlook for spring football is promising, and we are pleased with the results through the midpoint of the season. While the sports calendar in our upcoming fiscal fourth quarter tends to be quieter, FOX Sports is excited to present its summer of soccer, featuring over 200 hours of live soccer coverage across our platform starting with the UEFA European Football Championship on June 14 and Copa America on June 20. This summer will also feature a new schedule from FOX Entertainment, with returning favorites like Gordon Ramsay's Food Stars and exciting new shows like the 1%. This follows a successful spring slate that featured two of the top five new primetime series in Krapopolis and the floor. With Krapopolis, ranking as the number one new Primetime Entertainment Show and the floor as the number one game show season to date. Last quarter, we announced the formation of a new sports-focused digital distribution platform with our partners Disney and Warner Bros Discovery. We are happy to have hired truly a world-class CEO in Pete Distad and he is off to a flying start. In just several weeks, the JV now has over 150 engineers and executives dedicated to building a unique innovative product which focuses on sports fans outside of the traditional TV bundle. We've already launched an internal data service, which I have been trialing this past week, and I have to say it's an incredibly exciting product and we can't wait to launch it this fall. Today's media market is certainly dynamic, but the strength and leadership of our brands and their capacity to convert those strengths financially underscores our considered strategy. Underpinned by our best-in-class balance sheet, we ended the quarter with $3.8 billion in cash and just 1 time net leverage. We remain committed to driving long-term shareholder value creation through the thoughtful balance of managing our existing businesses, pursuing new adjacencies and returning capital to our shareholders. And with that, I'll hand it over to Steve.

Gabrielle Brown :

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

John Hodulik:

Thank you, and good morning everyone. Strong growth again at Tubi. I guess a couple of questions on that. I mean, first, what's driving the growth in TVT? Any color you guys can provide on CPMs? Disney yesterday gave you a little color on some weakness in connected TV CPMs and then three, any color you can provide on dilution at Tubi and maybe how you guys view future profitability of that business? Thanks.

Operator:

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

Lachlan Murdoch:

Thanks, Roger. So, with the MBI, obviously, I can't sort of comment on other people's sort of negotiations and where that may or may end up. And in terms of how we think about it affecting the value of the FOX Network and our sports portfolio. We're very happy with our sports portfolio. We obviously look at -- but packages as they come up but we see them as a portfolio or a bouquet of sports rights that we have, and we feel very strong with the current portfolio that we have, which is one of the reasons why we didn't pursue the MBA in this round of negotiations. But I think it does go to the value of broadcast television because sports leagues still need reaches the -- is still incredibly important for them, for them to drive their fan bases, for them to get the maximum amount of viewership to their games and matches. And so, the value of the FOX Network and frankly, our strategically kind of our position station group to any sports league only increases over time is what we're seeing. And therefore, I don't think coming of second part of your question, I don't think we are strategically disadvantaged with not having a subscription video-on-demand service because we found in the past, we can partner with others. Well, frankly, the leagues to tend to partner with others, we can take the rights where we can broadcast to the most amount of Americans possible and they can allocate rights to SVODs as needed. But they're never going to be able to live entirely without a broadcast network and the broadcast distribution.

Lachlan Murdoch:

And I'd just remind you, it's not only the value of the option, but also the equity that we have in Flutter, which is today worth over $900 million.

Ben Swinburne :

Thanks. Good morning. Just sort of a question around kind of your products coming to market, the streaming JV and also maybe how Tubi might fit in, any more you can share with us on sort of what you think is really differentiated about the product? We haven't seen it yet, you have. And I noticed in the Disney deck yesterday that it says that a definitive agreement hasn't been signed yet. So, I didn't know if there was something holding it up or if that meant anything or any update on sort of the go-forward plan and then I'm wondering Tubi with its reach as an app-based service, is that an opportunity for maybe bundling the JV product or merchandising and in some way, you have a pretty interesting direct customer relationship with Tubi. I know it's a different kind of product offering. But I was curious if you thought about leveraging that asset or those two assets together to create more value for the company.

Operator:

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

Lachlan Murdoch:

Great. Thanks, Jessica. So on -- let me start with political. We are confident -- obviously we're disappointed for multiple reasons that there wasn't a more competitive primary season. But we certainly know this is an election which both sides of politics or all sides of politics are very focused on, have raised a tremendous amount of money, and that money will flow ultimately to local television. And we are extremely confident of that. One of the reasons we're confident in addition to the amount of money that we know has been raised are just a position of our stations -- specific stations within the group and how that aligns with the political map. If you look at the tight -- so putting aside presidential election focused [ph] on a call to talk about sort of national trends and people focus on presidential. But you have to look below presidential and look at sort of Senate races. So, we have tight center races in key markets where we have big stations. And you have to remember, Jessica, these are big new stations, right? And political money tends to run alongside news on local news. And so, there's tight races in Arizona, in -- these are presented in Michigan, ceratin Pennsylvania and in Wisconsin. And also, of course, our DC station will benefit from tight race in Maryland. In addition, you've got a lot of issues on the ballot in different markets. So, Arizona, Florida, I think Maryland again all have a lot of issue money flowing into those onto the ballot. So, we think it's going to be an incredibly strong political season. We're just starting later than we had first expected. And then you traditionally have -- when you have a primary -- more contested primers. So, we'll start to see the benefit of that in the first half of our next fiscal '25 for us. The next question on M&A and the balance sheet, I agree wholeheartedly. I think we have the best balance sheet in the industry. So, I think that's the math. That's just a fact. And so, we continue to look for accretive opportunities that would align with our kind of strategic goals and initiatives and we'll continue to do that. We obviously don't want our balance sheet to go to waste but we haven't found anything yet that we're going to do or follow. So -- but it is something we are keeping a close eye on. And then on TV, what is -- how does Tubi look over the next three years? Well, Tubi continues to grow. Obviously, as you get to scale, the growth trajectory, which is just harder to comp with the growth that we've had over the last couple of years. But Tubi continues to grow. Money will continue to flow from linear entertainment television, particularly cable entertainment networks into streaming AVOD and SVOD with advertising supported SVOD services. That trend will not slow -- will be one of the main beneficiaries of that money flow. So, we're confident in the continued growth of Tubi. And under the leadership of Angele, it just goes from strength to strength.

Operator:

Okay. That question comes from the line of Michael Morris from Guggenheim. Please go ahead.

Lachlan Murdoch:

Thanks, Mike. Well, let me start. So, on the sports joint venture and how we certainly view it and how we discuss it with our distribution partners. I think the first thing, and this is incredibly important to us is that we are wholly and fundamentally supportive of the traditional cable television bundle. It will continue to be, for a very long time, our number one revenue stream. And we are all in to support our distributors in every way we can in that bundle and supporting their subscribers and their business. So that's -- that is absolutely a fundamental fact for us. Having said that, we've always said it's important for us to put our brands where viewers are, right? And in the universe of sports fans that don't currently take a cable bundle, that is the universe that the sports joint venture will be entirely focused on and it's frankly important to us that because we are so invested in the Cable bundle, that the sports joint venture will be very targeted and very focused on the nontraditional Pay TV viewer universe. And we think we can very cleverly and very -- in a very targeted way market to those subscribers so that we minimize any cannibalization of the traditional subscribers. And so, we're very open with our distributors. We're very open with how important they are to us and also how -- because of that importance, how we can focus the sports joint venture and the errors that needs to be focused on.

Gabrielle Brown:

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

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Lachlan Murdoch:

Thank you, Gabby, and thank you all for joining us this morning. Against the backdrop of an active news cycle and another robust fall sports schedule, our fiscal second quarter, again illustrated the strength of FOX. The growth we delivered in affiliate fee revenues was the standout this quarter, with the Television segment growing by 10% and the Cable segment returning to growth, once again demonstrating the power of our brands and our programming.

Steven Tomsic:

Thanks, Lachlan, and good morning, everyone. With the vast majority of our fiscal 2024 affiliate renewals now successfully completed, FOX delivered 4% growth in total company affiliate fee revenues, led by 10% growth at Television and a return to growth at Cable. This growth reflects the must-have nature of our content and the value that our distribution partners place on it.

Operator:

[Operator Instructions]. We have a question from Ben Swinburne with Morgan Stanley.

Operator:

We go to Robert Fishman with MoffettNathanson.

Lachlan Murdoch:

Well, let me start back to front, Robert. So there's no impact on the Netflix-WWE deal at all. So I don't think that plays a factor in this and a fact in how we approach our portfolio of sports rights. We will be aggressively competing in the sports market for sports rights, but nothing has changed there. The primary business and value in FOX Sports is competing both for every subscriber in the traditional cable pay-TV bundle and advertiser, viewer and ultimately, advertisers.

John Hodulik:

First, just quickly on the sports JV. Just any cash contribution? Or can you size any kind of contribution required for -- from FOX? And then turning to advertising. Obviously, a number of things affecting the numbers this quarter. You guys had some positive color as we look into next quarter.

Lachlan Murdoch:

I've lost track. Okay. So ad contribution advertising and cable -- cable advertising. After this, we won't need any more questions. I'll cover the whole gamut. Thanks, John. On the cash side, I'll let Steve fill in. But it's -- obviously, this business has both the -- there's marketing and other costs associated with running the business in the partnership, but it's also the revenue that we garner through affiliate fees for our networks. That come out as the business grows. But I'll let Steve fill in on the detail.

Lachlan Murdoch:

And then on advertising, I think the advertising outlook is, as I mentioned, with news, but you could apply this term to the overall market as sort of nuanced as we look at it. If I start with sports, we had a very solid regular NFL season from an advertising perspective. And I think of a stronger NFL post-season, which we were very pleased by. But also that was a -- it's a smaller revenue line, but we had a fantastic College Football season, really -- I think the story of this past autumn was really the strength of College Football and particularly as advertisers, sort of a founded and appreciated the quality of the audience watching College Football.

Operator:

It is from Jessica Reif Ehrlich with Bank of America Securities.

Lachlan Murdoch:

Jessica, so the -- first on how it affects the overall pay TV bundle. Again, the key market, the market that we will be driving towards is the market that sits outside the sports fan, who sits currently outside of the traditional pay TV bundle today, and there's tens of millions of them. So we are very confident that this is a large market and a large opportunity that we can address without undermining the traditional bundle.

Gabrielle Brown:

Operator, we have time for one more question.

Michael Morris:

So I wanted to ask about 2 areas of strength in the quarter. The first one on the sports sublicensing. Can you share a little more detail on what that was, how it impacted profitability and how to think about whether or not that's a recurring revenue and profit source? And then my second question is on the affiliate acceleration, which is great to see. We know that the rate of cord-cutting is going to be impactful on that number. It's very hard to predict. But on pricing alone and the precedent that you just said, should we look at this as the first quarter of a sustained stronger pricing dynamic? And how long do you think we should anticipate that you can continue to see this type of growth being fueled by those new contractual relationships?

Steven Tomsic:

Mike. So our sports sublicensing revenue we have in the Cable segment. So we own sports sublicensing income in relation to various sort of college sports properties and international soccer rights. Some of these rights come with some variable based economics to them, which we saw in the quarter. I think you should see this as somewhat of a one-off. It's not going to repeat like this going in future quarters, future years. And if you want to try and dimensionalize it then the size of the increase in Cable Other revenues between this quarter and previous quarter last year is a pretty good guide to the net benefit to us from those sublicensing arrangements.

Gabrielle Brown:

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

Lachlan Murdoch:

Thanks, everyone. Have a good day.

Operator:

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.

Lachlan Murdoch:

Thank you, Gabby, and thanks, everyone, for joining us this morning. I just want to start with a comment and a note of thanks. We are living through tumultuous times. And at the outset, I want to acknowledge the work our journalists are doing covering the horrific October 7 terrorist attack and the subsequent ongoing war in the Middle East.

Steven Tomsic:

Thanks, Lachlan, and good morning, everyone. FOX reported total first quarter company revenues of $3.21 billion, which is slightly above the prior year quarter. This was led by a 2% increase in affiliate fee revenues as the pricing gains from recent distribution renewals more than offset the impact from industry subscriber declines. From an advertising perspective, we, of course, faced the tough comparison to last year's record midterm political revenues at our local stations.

Operator:

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

Lachlan Murdoch:

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

Benjamin Swinburne:

My one question is on sort of unlocking value, although it does immediately have to spend 2 pieces that might be connected, I guess first -- it's a confession. I wanted to ask about sports and Tubi. So arguably, the popularity of sports, particularly football and even more particularly college football, has probably never been higher. I mean your college rights are probably more valuable today than ever. I'm just wondering if you guys have ideas on capitalizing and maximizing the return on those rights. Beyond the kind of stuff we always think about was advertising on the live rights and retrans fees.

Lachlan Murdoch:

No that's fine. I think the best way I can answer both questions sort of with one answer, I suppose, which is the value -- you're 1,000% right, college football has never been more popular. It's rating extremely well. And 1 of the things we haven't talked about is, frankly, advertisers have found it. Advertisers are pouring in to call triple with tremendous rates and with tremendous appetite for volume because they can see the value in this audience.

Operator:

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

Operator:

The next question is from John Hodulik from UBS.

Philip Cusick:

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

Steven Tomsic:

Thank you, everyone. Thank you.

Operator:

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

Lachlan Murdoch:

Thanks, Gabby, and thanks everyone for joining us this morning. With this morning's earnings release, we closed out a very strong fiscal 2023, fueled by successes across every aspect of our business. While Steve will cover the details of the fourth quarter in just a moment, for the full year we generated record annual revenue and EBITDA. Notably, we reported revenue growth of 7%, including 12% advertising growth, supported by major tentpole events like the midterm election, Super Bowl LVII and the FIFA Men's World Cup, as well as outstanding growth of Tubi and 3% affiliate growth led by the first one-third of our distribution renewal cycle. These results demonstrate that FOX's differentiated strategy continues to deliver engaged audiences at scale for our advertising and distribution partners across our sports and news verticals, while also driving exceptional growth across our digital businesses. In a world of increasing audience fragmentation FOX's collective linear and digital viewership was up 8% year-over-year. The onscreen reflection of that strategy was clearly apparent throughout fiscal '23 across our networks and platforms. FOX's broadcast of Super Bowl LVII was the most watched TV show of all time. Our Thanksgiving Day game was the most watched NFL regular season game of all time and the US-England match was the most watched US Men's World Cup match of all time. FOX News maintained its lead as both a top-rated national cable news channel, as well as the top-rated network across the entire cable ecosystem and ranks as the number two national network in all of US Television. And on the streaming front, Tubi made its debut in Nielsen's The Gauge, growing total consumption in fiscal 2023 by 79%, making it the number one AVOD player with consumption levels equal to a top five cable network. Tubi's fiscal '23 was nothing short of spectacular, underpinned by growth in total view time which in turn powered revenue growth. It was a year of increased awareness and engagement for Tubi, whether that was being recognized by Nielsen as America's most watched AVOD service, it's expanding content library and TBT metrics or the five Cannes Lions awards bestowed upon Tubi's Super Bowl spot. Each quarter, during the year saw successive gains at Tubi and the fiscal fourth quarter was its most impressive of all, with revenue growth of 47%, driven by strong engagement with total viewer time growing by 65%. Each month of the quarter set new records from monthly viewers. With Tubi's revenue and engagement accelerating in fiscal '23, we are looking to further strengthen Tubi's position in fiscal '24. To that end, we are very excited to welcome Anjali Sud, as the new CEO of Tubi and look forward to seeing Tubi flourish further under her leadership. At FOX News Media, we continue to lead both in ratings and engagement. The FOX News Channel ended the fourth quarter as the most watched cable network in total day for the ninth consecutive quarter, while maintaining its lead as the most watch cable news network beating CNN and MSNBC in both total viewers in the demo for both prime time and total day. FOX News debuted its tweaked prime time lineup last month. We are pleased with the initial results and are confident that our deep bench of talent will continue to set the standard for all news services as we move towards the 2024 presidential election. This past year, FOX News' leadership position was never at risk. We sustained double-digit advantages in total viewership of our nearest competitors for the entire fiscal year even during the period where our prime time lineup was in transition. In fact, since its mid-July debut FOX News' new prime time lineup is up over 35% in total viewers and up over 40% in the 25 to 54 demographic versus the June schedule. Meanwhile the FOX Business Network ended the quarter as the most watched business cable news network beating CNBC and total viewers during the business day for the fifth consecutive quarter. Across at FOX Entertainment, we had a solid year notching multiple wins including the number one entertainment telecast with Next Level Chef, the number one new drama of 2023 with the Accused and the number one new unscripted series with Special Forces

Gabrielle Brown:

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

Phil Cusick:

Hi, guys. A couple of quick ones, if I can. First, ESPN talking about looking for partners. Given your portfolio of sports rights, could a sports-centric JV makes sense for FOX? And alternatively would a league investment in a peer or competitor run into legal issues? And then second, can you just give us any update on the overall ad environment including demand for linear and -- versus digital? Thank you.

Operator:

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

Lachlan Murdoch:

Thanks very much, Jessica. On the balance sheet and Steve can chime in, but we continue to agree with you wholeheartedly, that I think we have the best balance sheet in the business. It gives us tremendous flexibility moving forward in both how we return capital to shareholders, whether it's through dividends or share repurchases. I think Steve mentioned in his remarks, I mean we repurchased $2 billion worth of shares this past year. That's probably an elevated level because as we look across the landscape, we didn't see any attractive M&A opportunities this past year that particularly caught our attention. We are always looking for businesses that fit our portfolio that will be attractive growth businesses for the business. But we take this with a – what's the word dispassion – dispassionate kind of view in terms of what's going to drive the best sort of long-term shareholder value. So we balance up return of capital and sort of accretive value opportunities on pretty much a daily basis. So Steve, do you want to add anything to that?

Gabrielle Brown:

Operator, next question, please.

John Hodulik:

Thanks. You guys recently announced that you'll be winding down FOX Bet. So I guess three quick ones. Sort of first any financial implications to that? Has your view on the sort of sports betting opportunity in the US changed? And anything you could tell us about your sports betting strategy going forward? Thanks.

Steve Tomsic:

Yes. That's a pretty comprehensive overview and financial overview. So financially just to reiterate as Lachlan mentioned we weren't funding the business at all. So there's no change to us from that perspective. There were some pretty small, sort of, commercial payments between FOX Bet and Fox, which will be -- which are immaterial to us in the grand scheme of things and is potentially ameliorated by the fact that we're now sort of free to look at other partnerships. So from that perspective I think it's a bit of a push either way. And then as Lachlan mentioned we absolutely preserve the value of the FanDuel option which is very valuable to us as well as the value of our holding in the headstock. But, I think, Lachlan covered it pretty well in his opening remarks.

Operator:

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

Lachlan Murdoch:

Thanks, Ben. Look first on Tubi the – obviously, Anjali she starts September 1 and we're looking forward to her adding her expertise and experience to the business. And obviously with any incoming CEO, I'm sure you'll see it with fresh eyes and find fresh opportunities. If you look at the Tubi business today, the TBT growth has really been everything. It's grown tremendously rapidly and strongly. And then what that's done is then that's obviously driven advertising opportunities and revenue. TBT growth continues to grow at a faster pace than revenue. So you see fill rates not actually keeping up to pace with TBT growth, which is a good thing, because there's actually more opportunities to place our clients' advertising than we can fill at the moment and that's really driven by the strong viewership growth. I think over time, and I should also say with the viewership growth I think one of the key differentiators for Tubi, if you look across the AVOD market is that it's primarily built on an on-demand platform. So our viewers are actively -- proactively clicking on content to watch. And so we know, they're engaged and we know they're in front of their screens watching that content. This is very different from just a fast channel where someone might tune in the channel and then leave it on and it auto plays in the background. There's an absolute room and a place for fast channels. Tubi has a fast channel service within it. But I think 90% of his viewing is actually from video-on-demand people proactively clicking on that content and coming to us to watch that movie or that TV show. And the library of those movies and TV shows continues to grow. I think this time last quarter, we had 55,000 titles. We now have 60,000 titles which equates to roughly 200,000 hours of individual movies and TV shows for our consumers to enjoy. So that will continue. I think one of the areas that we'll be looking at is expanding the categories that we're strong in. There's certain sort of content categories and verticals that we are super serving and other ones that we can continue to -- there's some low-hanging fruit to continue to monetize. Steve, do you want to talk to the EBITDA investment?

Lachlan Murdoch:

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

Operator:

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

Lachlan Murdoch:

Thank you very much, Robert. So look, our relation with affiliates is very strong. We catch up with them regularly. And we understand the headwinds facing broadcast television. And we're without -- in our station group right we see -- have all the same issues that they have. So we're simpatico with them in both the opportunities and the risk of the headwinds in that business. We are pretty -- what's the word vocal or proud of the fact that we've protected our key sports franchises for pay- TV environment, but also the -- for our affiliates, our distribution our most important distribution partners. We don't take our NFL games and put them anywhere else. We keep them exclusive for our distribution partners. And I think that's understood and very well received. And because of that, I think we will be able to continue to drive the sort of industry-leading pricing, both in a pay universe and free universe. And that pricing will certainly continue to ameliorate or balance any reduction in subscriber erosion and subscribers across the universe. So, that's where we feel we are with our affiliates. And I think, we're in a pretty good place for them.

Lachlan Murdoch:

Thank you.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the FOX Corporation Third 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. I'll now turn the conference over to Chief Investor Relations Officer, Gabrielle Brown. Please go ahead, Ms. Brown.

Lachlan Murdoch:

Thank you, Gabby, and thanks, everyone, for joining us this morning. FOX's strong fiscal third quarter operating results once again demonstrate the power of our content and the brands it underpins and the repeated capability of our focused strategy to deliver solid financial results. In the quarter, we grew top line revenue by 18%, led by the remarkable 43% growth in advertising and a solid 3% growth in affiliate revenue. Underpinning this performance was a record Super Bowl LVII on the FOX Broadcast Network which generated approximately $650 million of gross advertising revenue across our businesses and was the key driver of our 61% advertising revenue growth at our Television segment. This year's Super Bowl matchup between Kansas City and Philadelphia delivered 115 million viewers across FOX platforms, making Super Bowl LVII the most watched program in U.S. television history and the pinnacle of an extraordinary year for FOX Sports. The strong lineup of programming and advertising demand for FOX Sports continues into our fourth quarter, which includes the return of NASCAR the second season of the USFL, the start of Major League Baseball's 2023 season, the finals of the UEFA Nations League and a first for FOX the Belmont Stakes. Leveraging the reach of a Super Bowl lead-in, we launched the second season of Next Level Chef, which promises to be the next big lifestyle franchise from our Studio Ramsay partnership. Our entertainment business also found success with the number one new series and new drama over the year in Accused and the number one new unscripted series in Special Forces

Gabrielle Brown:

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

Robert Fishman:

I have a couple of related questions, if I can. Lachlan, after the Dominion settlement, is there anything that you can share to better understand the future settlement risk? And then related, can you discuss whether the departure of Tucker Carlson will lead to changes in the prime time programming strategy and then potential opportunities for more national advertising? And then for John and Steve, just if you can expand on the early confidence you have from recent MVPD renewals? And after seeing the acceleration in retrains growth this quarter, any more insight on whether you can get better pricing to outpace the elevated levels of cord-cutting or just more economics from your affiliate partners?

Steven Tomsic:

Yes, sure, on the affiliate. So Robert, yes, listen, we're pleased with the way our affiliate negotiations are going. You know that this year, we had roughly 34% the total affiliate book up for renewal. We've been successful in generating and establishing new pricing benchmarks for the network in FOX Sports or retrains and Fox Sports in those negotiations. And so with another sort of 1/3 of our book due for renewal in fiscal '24 and a touch under 30% during fiscal '25, we feel pretty confident that we can continue to deliver pricing gains in subscribers. If the subscriber rate of attrition stays at the same level, we expect to post ongoing affiliate revenue growth for the company.

Ben Swinburne:

I just want to ask about advertising. As you guys look into the rest of the year and head into the upfront, does Tubi give you guys an advantage as you go in to what is, at least, I would describe it as a soft demand environment for advertising and trying to drive pricing kind of across your properties, particularly with the new Tubi Media Group, just wondering if you think that's going to matter enough this year for us to maybe notice as we head into the fall. And then just on the direct response weakness at FOX News, do you guys have any visibility on sort of whether that's improving here in Q4 or what the drivers of that are? Any relationship to sort of some of the broader volatility around FOX News? Just wanted to get your updated thoughts on that.

Operator:

We'll go to the line of Phil Cusick with JPMorgan.

Lachlan Murdoch:

Thanks very much, Phil. On -- let me start with Tubi and apologies, Steve, for the capital management element of the question. So on Tubi, we're going to continue to invest in Tubi. It's at the same levels. We've been investing over the last year or so. We just think it's a tremendous opportunity for us. As I mentioned in my comments, the fact that we're now -- Nielsen's Gauge now has us over 1% of the U.S. television viewing is a tremendous sort of benchmark to have hit, and I see continued growth there. So from a consumer aspect and from a marketer's aspect, Tubi is becoming more and more a central part of usage and sort of an opportunity. And this is really because the focus Tubi's had or not -- we think of it over the last 3 years with our involvement, but obviously, the team there has done a tremendous job not only over the last 3 years but before that in really sort of driving sort of the best-in-class personalized AVOD experience, building an incredible library with nearly 55,000 titles in the U.S. alone. And again, to put that in context, that's 5 times the size of the Netflix library and now really being able to monetize that viewing in a more efficient, better way. So we're incredibly optimistic. And I would say the results are -- and we're incredibly pleased with the performance of tb going forward, and we think it's an appropriate area for us to continue to invest in. On the -- I'll turn it over to Steve on the -- on sort of capital management. But just on it, I'll just start by saying, look, we have a $7 billion buyback authorization. I think we spent about $4.4 billion of that. So we've -- my math's incorrect this time of the morning, a $2.6 billion remaining of the authorization. We fully expect to deploy all of that capital back to shareholders through our buyback. And any litigation has no impact on that at all. Yes, Steve.

Operator:

And that will come from the line of John Hodulik with UBS.

Lachlan Murdoch:

Thanks, John. Look, USFL, it's still -- it's just the start of the second season. We're very pleased with it. We're pleased with both its ratings, the quality of the games, its performance on television and ratings. And also, frankly, it's a performance on the ground with ticket sales and engagement with football fans. So early days, but we couldn't be more happy with it -- with how it's tracking today. In terms of additional sports rights, we look across our portfolio of sports rights. We're constantly managing them. We look at sports rights as they come up. And we also look at them as they get renewed just to make sure that they are efficient for us and that we're paying a responsible and appropriate amount for those rights. So we're constantly adjusting, but we do it with, I think, a real commitment to discipline in terms of what rights we would acquire or dispose of. So it's a moving -- it's always a moving feast, but I wouldn't expect anything dramatic at all in that area. What was the last question? The writer strike. So thank you. On the writer strike, look, I think for us, we are well positioned for the writer strike. We think that with our strategic priorities and sort of strengths in sports but also in news, these are 2 areas that are not affected by the writer strike. And the audience will pivot on a -- when they're watching television to those categories. In entertainment, you have to remember as well, we only program 2 hours of entertainment at night. That's a mixture of both scripted and unscripted content. So we feel very well positioned there with that not to be affected by the writer strike really at all. There'll be some scheduling changes with some of this descriptive content, but it's not something that'll have a significant financial impact on us.

Jessica Reif Ehrlich :

I just wanted to maybe follow-up on Lachlan's last point that you're not overly dependent on live and unscripted -- I mean, given you're live and unscripted, you're not overly dependent on the writers for entertainment. So given that, like, can you talk about your outlook for the upfront, also given macro, I mean, you seem to be in a very different position than most people, but the market is, most people say choppy, and then also given the decline in the paid TV universe. Can you just talk about how you see FOX News and sports transitioning over time?

Gabrielle Brown:

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

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter Fiscal Year 2023 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 will be given at that time. [Operator Instructions]. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Lachlan Murdoch:

Thanks, Gabby, and thank you all for joining us this morning to discuss our second quarter results. Our fiscal second quarter continued to build upon the strength of the first quarter to deliver record first half ratings and revenue at Fox. Financially, we delivered a 4% increase in our top line, including a 4% advertising revenue growth. Our EBITDA grew a massive 71%, principally due to strong advertising results from sports and political as well as the impact of exiting Thursday Night Football. Our television segment led this growth and had a truly stellar performance. The station's group posted another record political midterm cycle, with approximately $250 million booked during the first half of our fiscal year. This is higher than our previous midterm record and just shy of our fiscal '21 presidential year record. These are impressive numbers and reinforce the strength and breadth of our station group. FOX Sports was also a key growth driver this past quarter where advertising, pricing and demand remains solid on the back of viewership records for the NFL and for the World Cup. By every measure, FOX Sports is having an extraordinary year. Fox's domination of the fall was led by four of our most prominent rights packages, the NFL, the Big Ten network, Major League Baseball and FIFA, all coming together to produce a truly powerful schedule. For the fourth straight calendar year, FOX Sports is the industry leader in live events, with some notable achievements that bode well for our future, including the current NFL regular season on FOX averaged over 19 million viewers and finished as the number one NFL package on television. America's Game of the Week averaged just over 24 million viewers and is projected to be the most watched program of all of television for the 14th straight year. And our Thanksgiving game this year was the most watched regular season game ever on any network, delivering 42 million viewers. College Football had its most watched season ever on Fox, led by Big Noon Saturday, which was the most watched college football window for the second straight year, while the annual Ohio State-Michigan rivalry was the most watched regular season college game on any network in 11 years. And, of course, the 2022 Men's World Cup exceeded our expectations with average viewership of over the tournament up 30% from the 2018 matches. We can't wait for the Women's World Cup this summer, and we're already getting ready for the 2026 Men's World Cup here in North America. Of course, the strength of the FOX Sports portfolio was on full display this past Thanksgiving, with our traditional Thanksgiving NFL game, USA versus England in the World Cup, a huge college football game and America's Game of the Week, all spread over just four days. The ratings were impressive, but the revenue we generated was even better. We wrote just shy of $250 million over the long weekend. And the strength of FOX Sports has continued into the current quarter on the back of exciting player football and what will be a record sold out Super Bowl this coming Sunday. At Tubi, we had another strong quarter where ad revenues grew by 25% over last year, as we continue to outperform our peers. We have seen increases in almost every major KPI of Tubi, including CPMs, TVT and engagement. In fact, Tubi had its highest quarterly viewership in this fiscal second quarter, with total viewing time up 41% year-on-year, while December alone was the highest TVT and highest user month ever. These trends have continued early into the third quarter as Tubi add viewers and content to the platform. At FOX Entertainment, Rob Wade has settled into his new role as CEO and has already launched two of the season's biggest hits; Accused, ranked as the most watched debut on any broadcast or cable network in two years; and Special Forces

Gabrielle Brown:

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

Robert Fishman:

Hi. Good morning, everyone. Lachlan, you've talked about the importance of scale in the media industry. So now that the News Corp. deal is no longer being explored, can you just help investors think about what the future of Fox is as a standalone entity in the coming years? And ultimately, do you think it will be better off combined with another strategic or financial partner?

Operator:

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

Lachlan Murdoch:

Hi, Jessica. Good morning. So let me start with the advertising market. And as you mentioned, obviously, I don't believe I'll talk to the kind of the outlook. Advertising, like I know there's a lot of talk about advertising being soft in the market. We're really not seeing that. We're seeing advertising being sort of fluid and money coming in late. So it is different. It's a different environment than we were in a year ago or even a couple of quarters ago. But at the end of the day, we're still hitting our goals and achieving our revenue targets. It's just coming in late. And look, I think to be honest I think that goes to the strength of our portfolio, right? I think being in news and being in sports and the leader in those two categories, I think sets us apart in the advertising marketplace from a lot of our peers. So I don't want to say that that's our strength and certainly our relative strength in advertising is not indicative of the whole marketplace, but it's definitely indicative of our brands and our ability to achieve our revenue goals. So this Super Bowl to talk about some specifics. As I said, the money came in late. So we had some nervous moments. But we will right just shy of gross, about $600 million of revenue next Sunday. We are sold out. It will be a record Super Bowl for us, both in terms of total revenue and obviously in what we achieve for each spot. Ex the Super Bowl, if you back out of the Super Bowl, we are still up in national advertising revenue. And so I think that, again, bodes to certainly the strength of our brands and so the power of Fox. If I look at local stations, Jessica, categories, we're really happy to see a lot of categories back into robust growth. Auto is pacing up almost 30%; health, up 30%; pharmaceuticals, up 45%; travel, up 60%. And, of course, this is offset with categories like crypto money exchanges, I think down 97%. And so I'm still trying to find who the 3% less that's advertising. So there are some sort of swings and roundabouts, but the key categories are back in a very strong way. So that's probably more than you wanted on advertising, Jessica. On Tubi, look, all of our -- well, I'd say almost all of our KPIs are at record highs. I think December, the end of December was actually a particularly strong year in terms of TVT and engagement. And what we'll see is we'll see revenue. Revenue is up 25%, but I think what we're really pleased about is when your engagement and your total viewing time is up by more than that. As the market strengthens, we expect certainly more revenue to flow and follow that audience that we've garnered in Tubi. And all of the major studios continue to work with us. I think we're seeing benefit of people realizing that their libraries, they're sort of deep libraries, we can help them monetize those libraries. And so we're seeing -- you mentioned the Warner Brothers' deal, we're seeing everyone work with us, which is why Tubi has the biggest television movie library in streaming anywhere in the world. So we're really very, very pleased with it.

Operator:

Your next question comes from the line of Phil Cusick from JPMorgan. Please go ahead.

Lachlan Murdoch:

Look, I think we have a –we’ll talk about the market, we remain incredibly excited and optimistic about the wagering market going forward in this country. Obviously, it will take some more time for further states to be licensed and you'll start to see a shift from wagering advertising and marketing shift from local markets to national markets. We're obviously incredibly well-positioned on both sides to capture revenue from the wagering operators as they battle it out for us, supremacy in each of their markets. So we've done extremely well at the local stations and I think we'll see that shift to the national markets where obviously FOX Sports and to some extent FOX News and the entertainment network will continue to capture that revenue. So we are incredibly optimistic about it. I think from a corporate perspective, we're also the best positioned media brand to continue to partner with our wagering partners, particularly, obviously, the 18.6% option that we have in FanDuel is a fantastic position to be in. We have about a 10-year option. I think we have about eight years to go on the option. And Flutter will be our partner for a long time. So we feel very well in terms of where we're positioned.

Operator:

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

Lachlan Murdoch:

Thanks, Ben. I'll answer the Tom Brady part of the question and maybe the Hulu part, I'll let Steve talk to the value of FOX Bet and importantly the -- obviously the Flutter or FanDuel option. I won't be the first to congratulate Tom on a stellar career and congratulate him on his retirement. The whole FOX Sports team and Fox Corporation overall is really excited to have Tom join the team here. That will be in the fall of next year, '24. He is going to take a little bit of time to decompress, which he well deserves after such a stellar career. Let me just quickly talk to Hulu. The Hulu renewal was very important to us and also very important to Hulu. The kind of symbiotic relationship that we have with Hulu, it grows in significance as viewers more and more watch our content on a sort of catch-up basis. So when we look at our hit shows, we're not monetizing them in the first window in the live or even live plus same day window, as you all know, in the same manner that we used to. And so being able to capture the engagement after live and same day or even live plus seven days is critically important. And our Hulu deal really allows us to do that. For Hulu, it gives them tremendous content the next day and they are able to, I'd say, sort of benefit from or piggyback on the marketing spend and the reach that we give all of our content as we push it out. So it works very well for Hulu and it works very well for us. Steve, do you want to talk to the FOX Bet value?

Gabrielle Brown:

Operator, we can go to the next question.

Doug Mitchelson:

Thank you. Good morning, Lachlan. Where are you with the life cycle for your digital investments? I'm just sort of curious, when I think about Tubi, pretty consistently you've been talking about growth every quarter on these calls and engagement viewer and adding more content. How much more content is there to add? How much more growth is there to drive at Tubi? And same question on the Fox digital side. Thanks.

Gabrielle Brown:

Operator, we have time for one more question.

John Hodulik:

First question on the balance sheet. Investors are definitely going to like the accelerated repurchase, but you still have $4 billion on the books, relatively low debt. Just maybe talk about sort of the usage of that cash? How much cash do you need on the books and maybe what the M&A environment looks like out there and what kind of opportunities do you see? And then on the affiliate line, you said you haven't seen the impact of the renewals and the [indiscernible] that you expect you'll see over the renewals you'll expect to do over the next couple of years. When do you expect to sort of get into the sort of the wheelhouse and see those lines really start to turn from the renewals? Thanks.

Steve Tomsic:

John, I think if you fast forward, like if you fast forward to the end of the fiscal based on the ASR and our regular share repurchases, we'll have done $4.6 billion in share repurchases by June 30, call it. You compare that against how much we've deployed in M&A, which on a gross basis is about 1.5 billion on a net basis after asset sales is probably $500 million, $600 million. So we've been super balanced, super disciplined on M&A. And if anything, the SKU so far in the life of Fox has been towards capital returns to shareholders. So we're going to continue to be thoughtful in the way we deploy capital.

Gabrielle Brown:

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

Operator:

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

Company Representatives:

Lachlan Murdoch - Executive Chair, Chief Executive Officer John Nallen - Chief Operating Officer Steve Tomsic - Chief Financial Officer Gabrielle Brown - Chief Investor Relations Officer

Gabrielle Brown:

Thank you, operator. Good morning and welcome to our fiscal 2023 first quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding FOX Corporation's financial performance and operating results. These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA or EBITDA as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Steve Tomsic:

Thanks Lachlan and good morning everyone. As Lachlan mentioned, we have made a solid start to fiscal 2023, delivering total company revenue growth of 5%. This top line momentum was led by 8% growth in our advertising revenues, where in the quarter we continued to see healthy scatter demand for our leading news and sports properties, and generated meaningful revenue reacceleration at TUBI. We also benefited from a record fiscal first quarter for political advertising revenues at our owned and operated television stations. Notably, we are able to drive 3% affiliate fee revenue growth without the benefit of any significant renewals impacting the quarter, and trailing 12 months subscriber losses running at approximately 7%. Quarterly adjusted EBITDA was $1.09 billion, up 3% as our revenue growth was partially offset by higher expenses led by continued investment in our digital initiatives and increased rights amortization at FOX Sports. Net income attributable to stockholders of $605 million or $1.10 per share, compares to the $701 million or $1.21 per share reported in the prior period. Once again, this was impacted by the change in fair value of the company's investment this quarter, which we recognize in other net. Additionally, our effective tax rate was slightly higher in the quarter, primarily due to a re-measurement with our net deferred tax assets associated with the reduction in state taxes. This had no impact on our cash taxes in the quarter. Excluding this impact and other known core items, adjusted EPS was $1.21, up 9% over last year's $1.11. Turning now to our segments starting with cable network programming. Cable advertising revenues were up 2% as our market leadership in news continue to drive linear pricing gains at the FOX News channel. This was partially offset by lower programmatic revenues at our digital news properties in the current period, as well as the impact of scheduling effects at our National Sports cable networks, where last year's revenues benefited from the Concacaf Gold Cup and Copa América Tournaments. Cable affiliate fee revenues were consistent with the prior quarter. As we have signaled previously, we're in the early days of our next distribution renewal cycle and we are pleased with the outcomes of our earliest renewals, and we continue to expect to see these benefits take effect in the back half of our fiscal year and initially concentrated towards the television segment. Cable and other revenues increased 9% in the quarter, primarily due to higher FOX Nation subscription revenues. EBITDA at our cable segment is $742 million compared to the $774 million reported in the prior year periods, and included the impact of elevated breaking news cost and the timing of digital investments at FOX News Media. At Television, we delivered 8% revenue growth, led by an 11% increase in advertising revenues. Our television stations saw a record September quarter for political advertising revenues, while the FOX Network benefited from continued strength in pricing and additional MLB Broadcast of FOX Sports, partially offset by softer ratings. Notably, we saw a sequential reacceleration of growth at TUBI, with revenues up 29% to approximately $165 million. This was on the back of a 53% increase in total view time and stable CTM’s. Television affiliate fee revenues were up 6% as healthy growth in fees across all FOX affiliated stations more than offset any impact from subscribe declines. Other revenues increased 5% in the quarter, primarily reflecting the impact of the TMZ and MarVista acquisitions, partially offset by the timing of deliveries of Bento Box. EBITDA at our Television segment was up 14% in the quarter, where we saw the typical seasonal increase in our marquee rights at costs at FOX Sports, including the impact of our MLB renewal, partially offset by lower marketing and programming expenses of FOX Entertainment. We are clearly making strong progress in both audience growth and monetization at TUBI, which underscores our confidence in the long term value of this asset. So it is worth noting that the EBITDA we delivered in the quarter at the Television segment and FOX more broadly incorporates an approximately $50 million EBITDA investment in TUBI. Now turning to cash flow where we generated $196 million of free cash flow in the quarter, consistent with the seasonality of our working capital cycle, where the first half of our fiscal year is characterized by a concentration of payments for sports rights and the build-up of advertising related receivables, both of which reversed in the second half of our fiscal year. From a capital deployment perspective, fiscal year-to-date we have repurchased a further $300 million via our share buyback program. We remain committed to utilizing our full buyback authorization of $4 billion. Having now cumulatively repurchased $2.9 billion, representing approximately 14% of our total shares outstanding since the launch of the buyback program in 2019. Finally, we continue to maintain a very robust balance sheet where we ended the quarter with approximately $5 billion in cash and $7.2 billion in debt. Fiscal 2023 is now well underway and with a strong program of showcase events still to come, coupled with the strongest balance sheet in the industry, FOX is uniquely placed to navigate any macro uncertainty and deliver value to our shareholders. And with that, I'm happy to turn the call back over to Gabby.

Operator:

Thank you. [Operator Instructions] One moment please for the first question. That will come from the line of Jessica Reif Ehrlich of Bank of America Securities.

Lachlan Murdoch:

Good morning, Jessica. Thank you very much and I appreciate keeping your questions short. A number of questions, so thank you. I know it's tough, cause there’s a lot to talk about. But on the decline in the Pay TV universe as Steve called out, you know we've seen a decline of just about 7%. We're not seeing in sort of the most recent remiss that that decline is getting any worse, so it's obviously – the last year was 5% this time last year. This year we've seen this tick down to 7%, but it looks to have stabilized at 7%. And our focus is really in you know continuing to invest in our brands, particularly News and Sport, which are really essential to the Pay Television bundle. So we're not in a position as I think a lot of the cable, general entertainment channels, which are – you know are more at risk to people going to SVOD services and streaming to get that type of content, whereas you know there's only one place you can get FOX News and there's only one place you can get FOX Sports. So our strategy is to continue to invest and be essential for all of our distributors for their Pay Television bundles. And we've seen that play out through our renewals. We're at the beginning of our renewal cycle and so it's a massive three year cycle. I think in fiscal ’23, 34% of our aggregate cable and television segment distribution revenue is up for renegotiation. The next fiscal year it's also 34% up for renegotiation and in fact fiscal ’25 is still 28%. So we almost you know over the next three years, you know completely renew and refreshing and extend our cable distribution agreements. You know we are well underway with the first – having completed the first round of those renewals and I have to say we are extremely pleased with the outcome of those renewals because our distribution partners do value what we bring to the bundle and our commitment to the bundle. So those renewals have gone very well and have met every expectation we've had for them. The split between cable affiliate revenue and television segment affiliate revenue will shift slightly. I think you'll see the television affiliate segment grow at a faster pace than the cable affiliate revenue, and that's just in terms of how we negotiate those agreements with the distributors. In terms of a potential recombination with news corporations, I really can't talk about it. It's actually an independent process going through with the independent committees and it's not for me to you know discuss the conversation. Well, I don't know the conversation they are having or nor can I discuss them, so sorry about that Jessica.

Operator:

We'll go to the line of Robert Fishman with MoffettNathanson.

Lachlan Murdoch:

Good morning, Robert. How are you? Look, I think you know scale, it has to be focused right, and scale is important and what we've seen amongst our media peers over the last few years are our peers getting bigger through mergers and acquisitions, and so I think scale lends flexibility in many ways. So we continue to grow our business, we continue to look at M&A and be very disciplined in how we how we look at it, but we also do look at the importance of scale, particularly over the next couple of years when opportunities I think in the marketplace will emerge. They are having the scale be flexible and how we deal with them will be important.

Operator:

And that will come from the line of Ben Swinburne of Morgan Stanley.

A - Lachlan Murdoch:

Good morning, Ben. I'll start obviously with the TUBI and Steve, you can talk about the buyback and capital allocation. So to start with TUBI, you know if you look at TUBI as a business and what the team there have built is really a best-in-class AVOD service and they've had several years head start in this business. They are entirely focused on AVOD, but that's both from a – you know having established really a superior ad-tech stack and ad-tech team and also now combined with FOX, you know an advertising sales team with a proven track record. You know you couple that with the largest library available in the United States with 48,000 titles, which you know by the way is 5x the Netflix library. The cross platform opportunities that we are executing on across Sports and News and entertainment, you know it really sort of provides you know a tremendous platform that's absolutely taking off. You know TBT was up 53%. That really drives you know a tremendous amount of the sort of monetization as it flows through. We hold our CPM rates are pretty steady at TUBI. So it's really – it's not pricing that is – pricing has increased, but it's not pricing that’s accelerating. It's really the TBT time that's offering our clients and advertisers you know more opportunities on the platform. So we are tremendously excited about the future of TUBI as we sit here today.

Gabrielle brown :

Next question, please.

Phil Cusick :

Hi! Thank you. First, a follow up on the TUBI data points. Those are helpful, thank you. Can you discuss the potential of that business to evolve maybe from what it looks like today and I know you're in, specifically in investment mode, but what does it take to get that EBITDA number to a positive over time. And then second, any sort of update on the Flutter negotiation or timing there? Thank you.

Steve Tomsic:

Flutter?

Gabrielle brown :

Next question please operator.

Steven Cahall :

Thank you. I know you're not commenting on the merger itself, but I think you mentioned that a majority of independent shareholders need to approve it. So I was wondering if you could at least comment as to whether shareholders are going to be provided with some incremental information between now and I guess what will be a required shareholder vote. And the reason I ask is I think that FOX in my opinion, is a great business. So I think shareholders are wondering why they want to mix a great business with just a different business. So if you could at least comment not specifically on the deal, but what that investor education is going to look like, I think that would help everybody envision what's going on. Thank you.

Gabrielle Brown :

Operator, we have time for one more question.

John Hodulik:

Great! Thanks guys. Maybe first a couple of follow-ups on the TUBI data. I mean first and Lach, you may have covered this, but like what content is driving that 50% increase in TVT there? And then is the $50 million investment that we saw in the quarter, is that a good run rate going forward? And is that – I mean I would imagine that's not a – that doesn't constitute a change in the guidance for sort of flattish digital dilution in the quarter. And then lastly, just back to the ad market. I mean anything you could say about sort of ad-trends, especially in the local TV market, ex-political as we head into the December quarter, because again you know there's been – apparently there’s been a number of sources of weakness there and just wondering what you're seeing in that part of the market? Thanks.

Steve Tomsic:

Just John, run rate for TUBI is at $50 million absolute EBITDA deficit in the quarter. Last year we sort of across - TUBI across the whole year was in the low 200’s in terms of EBITDA deficit for the company. I would anticipate that the $50 million we saw last year, and I expect this to be the same case this year, where the second half of the year had relatively more investment than first half and so you should expect to see a relatively consistent pattern with that. And listen we – it doesn't change sort of our guidance in terms of the dilution around digital investments across the company, whether that includes TUBI, Nation, whether block-chain, the rest of the portfolio that remains intact as it is. But TUBI listen, as we see that business develop, we'll continue to invest in as we see that top line continue to grow, which is exceeding our expectations.

Gabrielle Brown :

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

Operator:

And ladies and gentlemen, that does conclude your conference for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. I would like to emphasize that functionality for the question-and-answer queue will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please, go ahead, Ms. Brown.

Lachlan Murdoch:

Thanks very much, Gabby, and welcome aboard. Well, we have concluded another successful fiscal year, achieving both the financial and operational goals we set ourselves with a relentless focus on strengthening our core brands, while investing in our high-growth digital initiatives. Over the year, we delivered 8% total company revenue growth, including 7% affiliate revenue growth, notably, without the benefit of any meaningful renewals and 9% advertising revenue growth, despite the record political revenues we saw in the prior fiscal. Those of you on this call, who were at our 2019 Investor Day, will remember our commitment to you that we would have achieved $1 billion of incremental Television segment affiliate revenue by the end of calendar 2022. I'm more than pleased to confirm that we have achieved that $1 billion target in this past quarter a full six months ahead of schedule. As anticipated, our EBITDA was down modestly, as we continued our investment in Tubi and the FOX News Media digital properties, including FOX Nation and FOX Weather and with the launch of the USFL this past spring. Most importantly, Fox continues to stand apart in a crowded media ecosystem, delivering a consistent operating performance and a robust free cash flow profile alongside an enviable balance sheet. Our leadership position was again evident during the recent upfront advertising sales cycle, in which we booked volume commitments approximately 15% above last year's upfront, with nearly 25% of our current year commitments across our growing digital properties. We achieved pricing increases in the high single to low double digits, as compared to last year's upfront. Sports led the upfront market, illustrated by the fact that we sold more NFL Sunday advertising in the current upfront market than we did across Sunday and Thursday combined in the prior year's market. This excludes advertising commitments for the upcoming Super Bowl, where we are pacing well ahead of schedule and seeing very robust demand at record pricing levels. Our success in the upfront spanned our entire portfolio. We were able to achieved broadcast level pricing increases at FOX News, boosted sellout at FOX Entertainment and importantly, drove significantly more incremental ad dollars into Tubi. We are, of course, aware of the chatter around advertising headwinds. And of course, we will be prepared if the market turns downward. But let me be clear, we are currently not seeing an adverse advertising impact on our business. This speaks to the unique positioning and strength of our core platforms. Over two-thirds of our fiscal 2022 advertising revenue was generated by live content with sports and news, delivering 40% and 30% respectively. Locally, base market advertising sales have been stable. In fact, we are currently seeing a return to growth in the auto category for the first time in a couple of years. This stability in the base market provides a good foundation for the upcoming political cycle where the outlook is remarkably strong. On a comparable basis, our June quarter political advertising revenues were roughly three times larger than those of the fiscal fourth quarter of the last presidential election, which turned out to be an all-time record political cycle for the company. With the combination of political races and ballot issues across our markets, we continue to expect this election to deliver another record midterm cycle. In fact, excluding the impact of the Georgia runoffs in the last cycle, this midterm cycle looks certain to surpass the 2020 presidential cycle at our local stations. There are US center races in 13 of our 18 markets, including what we expect to be heavy political spending in Arizona, Florida and Georgia. Additionally, there are gubernatorial races in 17 of our 18 markets, where we expect heavy spending in Arizona, Florida, Georgia, Michigan, Texas and Wisconsin. Add to that the issue money in a few key markets and we are seeing an unprecedented wave of political spending which accelerates as we head towards November. At the national level, we believe that we achieved the highest upfront pricing increases in cable news history at FOX News, which to a certain extent is to be expected, as the FOX News channel again closed the year, as cable's most watched network in prime time in total day and continues to generate audiences on par with those of the Big 4 broadcast networks. FOX News was the only cable news network to post viewership gains in the fiscal year in the key adult 25 to 54 demo and total viewers, while extending its streak to 16 consecutive months beating CNN and MSNBC combined in prime and total day for both the key demo and total viewers. For over two decades, FOX News has been the highest-rated cable news channel in prime time. Notably, FOX News just finished the month of July as the third most viewed network in weekday prime in all of television, trailing only CBS and NBC. I've spoken about the political diversity of the FOX News audience previously, specifically about the fact that we have more independents and Democrats watching us than watch CNN or MSNBC, but the diversity of our audience extends beyond political affiliation. In July, the Fox News Channel was the most viewed cable network with Asian and Hispanic viewers. In fact, in that month viewing among Hispanic households was up 38% and among Asian households, up 43%. Elsewhere news, the FOX Nation platform increased its subscriber base by approximately 80% over the past fiscal year, supported by sustained and high conversion rates of trialists to paid subscribers and retention rates well above industry averages. At FOX Sports, live event viewing was up 5% through the first half of the calendar year led by our NASCAR schedule, which generated viewership up a solid 10% over 2021. This spring was busy for FOX Sports, as we launched the inagural season of the USFL. The USFL averaged over one million viewers on FOX, at least 20% higher than the EPL on NBC and regular season NHL broadcast on ABC and more than twice the viewership of MLS on FOX. In its first season, the USFL clearly delivered on its most essential goal, which was to demonstrate that the league belongs alongside other long-established spring sports properties. And as you know, we have an incredibly strong year ahead in sports which includes the FIFA Men's World Cup beginning this November and the Super Bowl next February. At FOX Entertainment, our content strategy is focused on ad-supported multi-platform television that can thrive both creatively and financially well into the future. We look to use our broadcast network to build and support businesses beyond our linear air. An example of this approach is Next Level Chef which was the number one new broadcast entertainment program this past season and FOX' first owned production inside our partnership with Gordon Ramsay, whereas we used only to license Gordon's product from third parties, we now license hits like Next Level Chef to third parties and we have done so with the sale of the format to ITV in the UK. Another example of how we extend and monetize our IP is the just launch of Gordon Ramsay FAST Channel on Tubi. And speaking of Tubi one year ago -- one year into our focused investment cycle at Tubi, the platform generated TVT growth of nearly 40% and revenue growth of 45% across the fiscal year with both metrics coming in better than planned and reinforcing our decision to invest in this strategic asset. During the June quarter 34% growth in TVT helped drive revenue growth in the low double digits, despite a more difficult prior year comparison when we began our ramped content and monetization strategy. In the quarter, we launched 25 linear channels, grew our VOD library to over 45,000 titles and premiered 13 efficient Tubi Originals. We will continue to invest judiciously in Tubi with our sights set on achieving $1 billion in revenue run rate in the next couple of years. As you know, our affiliate renewal cycle begins in earnest this new fiscal year and we are again looking forward to industry-leading gains from the superior value of our channels and services. With some early meaningful station and affiliate deals already completed including the recently closed Verizon deal, we go into this renewal cycle with confidence the market appreciates the value of our brands. In aggregate, these financial and operating achievements again highlight the fact that the FOX story is one of strength, one of focus and one of stability. We will see how the macroeconomic environment evolves during the months ahead. But as we have demonstrated over the course of the last few years, FOX is well positioned to outperform. We remain encouraged by the FOX specific trends that I've highlighted and that we're observing in real-time, underpinned by the best balance sheet in the business the same solid balance sheet that helped us thrive, despite the challenges of COVID and that will continue to support our investments for long-term growth and shareholder returns. And with that I will turn you over to Steve.

Gabrielle Brown:

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

John Hodulik:

Okay, great. Thanks guys. Two quick ones if I could. First of all on the Verizon renewal, anything you could tell us about pricing you got with that deal and how that positions you for the sort of upcoming renewal cycle? And then looking out into 2023 given the cash balance and sort of all these sort of EBITDA drivers, how should we think about capital return and the buyback? And do we have to wait for a resolution to the FanDuel situation, or how should we think about just sort of giving all the cash on the books and which you'll generate this year? Thanks.

Steven Tomsic:

Yes, hi John. So, yes you're right. Listen, we've got a really strong balance sheet. We ended the year with a little over $5 billion in cash and we -- as the opening remarks indicate, we're really bullish about going into fiscal '23 from a revenue, EBITDA and cash flow perspective. But this now story remains consistent. We're going to continue to -- our biggest use of cash since the inception of FOX from a capital perspective is to be -- is to actually return it to shareholders and in my opening remarks, I talked about the volume that we have returned to shareholders and we continue to remain committed to that. We have $4 billion authorization. We have $1.35 billion of headroom left in that. But we're going to remain open to investing both organically and inorganically in the business. We're going to be balanced about that as we see opportunities on the horizon. So, a remarkably consistent story on our capital allocation.

Operator:

And that is from Phil Cusick with JPMorgan. Please go ahead.

Lachlan Murdoch:

So, on the advertising market -- and good morning, Phil, I'll give you a little bit of color. I might jump around a little bit. But as I mentioned, for us, one of the most sort of pleasing things that we're seeing is actually in the local stations our base markets. So ex-political, the base market is very stable. And as I mentioned in my remarks, particularly the return to growth for the auto category is -- it's obviously something that's concerned us over the last couple of years with COVID and the softness in the auto category, the return of growth in the auto category is a really strong indicator of things to come. We are seeing locally two verticals or two categories that are soft. One is the local wagering sort of betting category soft. But that's really what we're seeing there. I think it's pretty interesting and perhaps predictable a shift of that business going to national. So where we're seeing softness in local for wagering, we're seeing strength in national for the betting market. I think that's the purpose or the reason for that is obviously as more states become legalized in the national platform is particularly national sports is an efficient and a good buy for the betting businesses. And then we're seeing some softness in government spending that was really COVID health spending over the last couple of years, which obviously is not there anymore. But that's being more than made up across our other strength in our other categories. So, two areas of weakness locally in betting and government, but it's more than made up by strength in other categories. In terms of the scatter market, we're actually seeing a -- scatter for us before we get into the fall sports cycle is a quiet. The summer is a quiet period for us or it has been. So we actually don't have a lot of scatter avails, but scatter pricing is up in the low double digits which is good to see that strength. And then from a macro environment point of view, again, we're seeing no impact in our advertising across our businesses with the exception of softness in, which I think has been well reported in other areas, some softness in programmatic advertising. For us, that's sort of 10% of our advertising business. So it's not having a significant or meaningful impact on us at all and that 10% is really due to programmatic advertising into TUBI and into our FOX News Media digital platforms. Steve, do you want to answer the second part of the question?

Gabrielle Brown:

Operator, we go to the next question, please.

Robert Fishman:

Good morning, everyone. There's lots of chatter right now around the Big Ten renewal in the marketplace. Just wondering if there's anything you can share specifically on those rights or maybe bigger picture of how FOX is positioned to renew key sports rights with your current portfolio of assets compared to either some of the pure digital companies or other media companies with SVOD services? And then how do you think about the ROI of the sports rights investments going forward?

Gabrielle Brown:

Operator, we go to the next question, please.

Ben Swinburne:

Hey. Good morning guys. Two questions, one, I think there's been a lot of enthusiasm over the past couple of years about Fox's opportunity in sports betting. I think it's gotten a little quieter on that front at least in terms of the market discussion. Could you guys update us on, what you see ahead of the company there both directly with FOX Bet? And is there any timing on something with Flutter, and also just sort of the benefits to the broader business? And then I just wanted to clarify, Steve you said you expect to maintain the current investment level in fiscal 2023 versus 2022. Is that a comment on just the amount of capital you're deploying, or is that sort of an EBITDA net impact on EBITDA, just to make sure we understood the comment there? Thanks.

Steve Tomsic:

Hey Ben just picking up on your question around organic investment. So the way we define -- we had -- we called out $200 million to $300 million of net EBITDA of our investment for fiscal 2022. So put another way our fiscal 2022 EBITDA would have be $200 million to $300 million higher than what it was had we not made those investments. We don't -- we anticipate maintaining that level of investment meaning that when you compare 2023 to 2022 you will not have that drag on the results. So that explains that for you.

Operator:

Very good. That's the line of Doug Mitchelson with Crédit Suisse. Please go ahead.

Lachlan Murdoch:

Hi, good morning, Doug. And hope you’re well. So on -- we have a Big Ten digital rights and we will keep those in the new deal. So I hope that clarifies, that again I don't want to say too much because it's really -- it's for the Big Ten to announce their new agreements. In terms of upfront volumes ex, I think your question was what are they ex-Super Bowl. Obviously, we look at everything ex-Super Bowl, because it's obviously such a huge year for us. We're looking forward to we're getting record pricing for Super Bowl, and we're well ahead of plan in terms of selling our Super Bowl position. But ex-Super Bowl upfront volumes were about 15% higher than the last upfront. I think one of the -- and that's across entertainment sports and news. I think the important thing to note there, though is that the upfront volumes to some degree, are a metric that we control. We chose a very purposefully and I think in a very disciplined and hopefully, a judicious way to sell more volume into this upfront, because we felt it was a period where having certainty around or the highest level of certainty we can around, our sales and our inventory was important. So for instance, in years where we would -- in the past years where we would sell in the mid-70s percent of our kind of available ad impressions. We announced we sold in this upfront, in the low to mid-80s. And I think that was sort of a smart decision and one that we felt was appropriate, given any uncertainty around the economy of the advertising market going forward.

Gabrielle Brown:

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

Steve Tomsic:

Thank you.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question and answer session. I would like to emphasize that that functionality for the question and answer queue will be given at that time. [Operator Instructions] And as a reminder, this conference is being recorded. I will now turn the conference over to our Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe and good morning, everyone. Thank you for joining us on this call. I don’t know about everyone else but I often find early mornings after a coffee or two or three to be good time to reflect on the progress we are making and to plan the days or weeks ahead. Sitting here on the FOX lot with my colleagues, I can recall our investors that when we saw all of you or most of you in person and kicked off the new FOX, now already a few years ago, some of you’ve asked then correctly, could the new streamlined FOX aggressively grow its top-line revenues? And what we committed to you then that we would add $1 billion of television distribution revenue by calendar of 2022, we all knew that proof would be in the pudding. So what’s pleasing that this quarter, we again delivered healthy distribution and advertising revenue growth across our brands and complemented by further stellar growth at Tubi. Overall, we delivered 7% revenue growth led by 9% advertising growth and 5% growth in our distribution revenues. As a reminder, this 5% growth in distribution revenues does not include the benefit of any material renewals this fiscal year. Those renewals start next year and our advertising growth was notably broad based. Cable Advertising grew by 20% in the quarter. This growth was driven by FOX News as its pricing and ratings trends more than offset the elevated level of preemptions due to the coverage of the war of in Ukraine. Television advertising grew by 6% in the quarter. This increase was led by Tubi, which saw its advertising growth accelerate from approximately 40% in the December quarter to 50% on the back of increased engagement. In addition, continued strong demand for sports drove overall growth at the FOX network and at the local level, advertising revenues increased, despite continued supply chain and other economic headwinds. As we look to our upfront next Monday, we are encouraged by the early momentum in the market and we believe that our focus on lives including the must have events of the coming year such as the Super Bowl, the World Cup and even the mid-term political cycle puts us firmly in the lead with our advertising partners as upfront deals are made. And, as we established last year, Tubi will continue to play a leading integrated role in our upfront efforts. We are in this enviable position due to the execution of our strategy by our core business units. It’s hard work, but it pays off. FOX News channel finished the first quarter of calendar 2022 as Cable’s most watched network in prime time and total day viewers. In fact, FOX News was the only Cable News network to post gains versus the prior year quarter in total viewers and the key demographic are adults 25 to 54. FOX News now beat CNN and MSN we see combined in total day and with both total viewers and the key demo for nine consecutive months and with a total base share of 54% across both demos. These achievements reflect the growing breadth and depth of our programming slide. Notably, The Five was the most watched program in Cable News for the second consecutive quarter. Meanwhile, Gutfeld delivered its highest graded quarter while Jesse Watters Primetime, which launched in late January is averaging over 3 million viewers in the 7 PM time slot. Broadcasting 97 of the top 100 most watched cable news telecast this past quarter FOX News continues to attract the most politically diverse audience in its peer group watched by more democrats and independents than MSNBC and CNN in total day and primetime. Meanwhile, our sustained and disciplined investment continues to drive subscriber growth and engagement at FOX Nation. The FOX Nation subscriber base has more than tripled in less than 18 months, driving engagement levels to new heights in each quarter. The average FOX News fans have clearly embraced the FOX Nation platform as demonstrated by its consistently high conversion rate or trial us to paid subscribers and retention rates well above in industry averages. Momentum also continued at FOX Weather, which benefited from expanded distribution on Roku, YouTube TV, and Amazon resulting in sequential growth in total view time across each month of the quarter. At FOX Sports, the USFL is off to an encouraging start. Through its first three weeks, nearly 20 million people have watched the USFL on TV and games on FOX and NBC are averaging 1.5 million viewers. That compares favorably to well-established spring sports properties like, The NHL, Formula 1, The EPL and MLS, all properties which either earn sizable rights increases or expected to do so soon. We are clearly establishing that USFL belongs in this competitive set, which is our primary goal in this first season. At the NFL, we are pleased to announce that we have reached agreement that carry an incremental game this coming year on Christmas Day. As a reminder, last year’s Christmas Day game on FOX delivered over 28 million viewers. We look forward to the release of the full NFL schedule expected later this week. Elsewhere, our NASCAR season is off to a strong start. Though we are early, the low -teens gains we are seeing in viewership would represent one of the more meaningful single season improvements across the 22 year history of NASCAR on FOX. And we couldn’t be more excited about the upcoming 2022 FIFA World Cup on FOX Sports with the qualifications of the U.S. men’s team and its blockbuster match against England on Friday, November the 25th. This match will contribute to an unprecedented Thanksgiving weekend of Sports on FOX, book ended by the Dallas Cowboys on Thanksgiving Day and the Michigan, Ohio State rivalry on Saturday. That’s likely to add up to most watched NFL game over the regular season, the most watched U.S. men’s national soccer team match as ever and the most watched College Football Game in the season, all during the busiest consumer shopping weekend of the year. This speaks to the power of our platforms and the prudence of our strategy. Of course, our linear businesses are complemented by Tubi, where total view time increased 50% propelled by record quarterly viewership. In fact, Tubi delivered 18 of its top-20 Tubi key days in its history this past quarter, a period where there is traditionally some softer seasonality in the AVOD market. Meanwhile, Tubi expanded its industry-leading library and now accounts more than 42,000 titles in its portfolio. Importantly, Tubi also renewed key distribution deals including its Amazon partnership, and signed its first custom deal for Samsung’s smart TVs. In the third quarter, we continued to invest in the future of Tubi, which we believe will be a strong growth engine for the company for years to come. We have also invested in FOX Weather, which is now available ubiquitously in every broadband home across the country and provides our clients with a new, very broad advertising platform. And finally, FOX Nation goes from strength-to-strength as it builds upon the engagement between FOX News and our most ardent fans. These initiatives illustrate the entrepreneurial nature of FOX endowed with America’s strongest media brands and most enviable balance sheet. Before handing over to Steve, I'd just like to acknowledge the incredible bravery, sacrifice and professionalism of the entire FOX News reporting team in covering the war in Ukraine. Journalism is rarely easy, and often, it is very hard. Bearing light on the horrors of this war and the resulting refugee and humanitarian crisis, it is born. It's probably the hardest assignment we can give. I am, we all are, deeply grateful for the tremendous work and extraordinary journalism that Trey Yingst, Jennifer Griffin, Steve Harrigan, Jeff Palcott, Ben Hall and many more excellent reporters have provided our audience. Tragically, two of our journalists were killed in Kyiv and Ben Hall remains in treatment for his serious injuries. Our thoughts and the thoughts of the whole FOX family are with them and their families. With that, I’ll hand over to Steve.

Lachlan Murdoch :

Thank you very much, Steve. As you know, we usually, after Steve's comments, we go straight to Joe and start the questions. But we have a breaking news, which I am in the spirit of being always open and giving our investors and our shareholders the latest news in the company. I'll go straight to this. I mean, literally, this is happening in real-time. We are pleased to announce that immediately following his playing career, whenever that may be, seven-time Super Bowl winner Tom Brady will be joining us at FOX Sports as our lead analyst. Over the course of this long-term agreement, Tom will not only call our biggest NFL games with Kevin Burkhart, but will also serve as an ambassador for us, particularly with the client and promotional initiatives. We are delighted that Tom has committed to joining the FOX team, and we wish him all the best during this upcoming season. I am sure everyone joins me in warmly welcoming Tom Brady on board. Thank you very much. And with that, I'll hand over to Joe

Operator:

[Operator Instructions] We have a question from the line of Ben Swinburne. Please go ahead.

Lachlan Murdoch :

Thank you, very much, Ben. Look, I can tell you on the first part of your question that, like I said, we're incredibly excited to have Tom joining us. It's entirely up to him for when he chooses to retire and move into his, what will be exciting and stellar sort of television career, but that's up to him to make that choice when he sees fit. In regards to Tubi and the upfronts and how that plays into sort of how we position the Tubi business going forward and to when it returns to profitability, it's important to note that on Monday, when we are engaged in our upfront presentations, we've already spent several weeks engaging with clients and advertisers on upfront negotiations and Tubi has been at the forefront of all of those conversations. I think our clients can see both the shift to AVOD and the streaming advertising. At the same time, they see the strength of where Tubi is positioned as a leader in that market. And then we're constantly on a regular sort of daily basis, balancing carefully the ad load in Tubi and the fill rate of that – of those advertising slots. And as you know, Tubi has an incredibly intelligent ad tech that can do that dynamically viewer-to-viewer, customer-to-customer. We can dial that up or dial it down really as we see fit, but we think it's important that this early life cycle of advertising video-on-demand services to maintain the highest sort of quality viewer experience and kind of consumer experience on the service. So we're pleased with where that is. But really, it would be up to us to be able to increase that ad load and drive revenue and bring it back to profitability, which, as you know, Tubi has been profitable in past quarters. But as of today, the right strategy and the right way forward is to continue to carefully and deliberately invest in the growth of Tubi, which I am – which we think is going to really be the leader in advertising video-on-demand certainly in this country.

Operator:

We have a question from Jessica Reif Ehrlich, Bank of America. Please go ahead.

Lachlan Murdoch :

Sure. Thank you, Jessica. I am not sure if there was two questions or seven, but they are always good questions. So, thank you very much.

Lachlan Murdoch :

On the outlook, so I think I'll remember to advertise – to answer most of them as I go through this answer, but from a advertising perspective and particularly heading into these upfront negotiations, we're already in the upfront season, but as we get to the pointy end of that that season, we're seeing really solid demand across our businesses. In pricing, entertainments seeing pricing in the sort of high-single-digit, mid to high-single-digit sort of range above last year. But in Sports News, as you said, we are very well positioned. We are seeing sort of our pricing in sort of mid-double digits. So sort of the mid- to high teens pricing increase is driven by demand across some live sports and live news. So, as we – that gives us a great deal of confidence as we move into these upfront negotiations. You add to that, obviously, the inclusion of Tubi with 50% growth in DVT time and engagement. It's a really strong position to be in. Our sports properties are driving and that our must-have sports tent poles this year are really driving a lot of interest from our clients. If I could give one word of advice, which I wouldn't do, but if I can give one word of advice to our clients and advertising partners, it's getting in early because these – some of these key events are selling extremely well already. So, we fully expect to see sort of continued advertising strength. That's without even talking about the mid-term election cycle, which by all estimates will be a record mid-term cycle for us. We keep a close eye on the races in all of our markets and it's pretty amazing to see where we have not only tight races, but also contested primaries pretty much across the majority of our owned and owned stations. So, we think the coming mid-term elections will be – will really be an advertising boon for us, as well Moving on to Pay TV pricing, well, from – frankly, from both an advertising point of view, which is incredibly strong with the strength of FOX News, and I spoke about it a little bit in my in my earlier statements, the strength of FOX News, but also the strength of FOX News and the station group from our retransmission and distribution revenue point of view really has never been stronger. FOX News is effectively competing with the free-to-air broadcasters in terms of audiences. It's actually usually beating, many nights of the week sort of beating broadcast networks and we expect our pricing power to continue to strengthen with performance like that. So, yes, I think I've answered most of, if not all of your questions, Jessica. But in short from both from an advertising perspective and from a television distribution or retransmission revenue perspective, we think we're well positioned, particularly in a year or a cycle where we're coming up to, I think, over the next two years, two-thirds of our distribution revenue coming up for renewals.

Operator:

We have a question from Robert Fishman of MoffettNathanson. Please go ahead.

Lachlan Murdoch :

So, hey, Robert, how are you? The – one of the pieces of work that the entertainment network has sort of undertook over last year, but it's our – it’s earlier than that is really the ability to kind of transform that business to where it can tightly control its programming costs in a way that really has them at a level that really hasn't been achievable before. This goes to the acquisition a few years ago of Bento Box, so we can control more of our animation costs. It goes to the acquisition of TMZ, so we can really control, sort of high-quality factual content and specials that we put on the network and other things such as MarVista. MarVista is focused a bit more on Tubi. So the work in the background of being able to own and control, I should also mention, by the way, I apologize for not, very importantly, the joint venture with Gordon Ramsay Productions, that's incredibly exciting. Gordon has been a key partner of ours for many, many years and his plans for the growth of that business, not just in the U.S., but what we can do with the IP, Gordon Ramsay's IP around the world is really exciting to see. So we have high expectations for that partnership. So all of that really feeds into the network's really ability to control its programming across multiple lots. As you know, the FOX network is only two hours a night in primetime, and so it's an easier volume of hours to digest and the program towards. What was the last part of the question?

Lachlan Murdoch :

You can stay more pleased. Steve is very careful.

Joe Dorrego :

Operator, we can go to the next question.

Doug Mitchelson :

Hi, Lachlan and team. Thank you for taking the question. Should investors expect fiscal 2023 to see operating leverage against your digital investments, revenue growing faster than OpEx with those? And Lachlan, I am not sure if you're prepared to give any sort of update on ambitions for Tubi, but it's been growing rapidly, you're investing a lot in it. And FOX has been in kind of the interesting investment in that not making a strong pivot to streaming to some of your peers, but yet Tubi is an interesting investment opportunity that's impacting margins this year. So just kind of understand where you think that asset could go and what the investment cycle looks like would be helpful I think? Thanks so much.

Joe Dorrego :

Operator, we have time for one more question.

Steven Cahall :

Yes. Thanks very much. Good morning. Maybe first, I am sorry if I missed this, but I think you maybe indicated that you could be at an end of arbitration by June. So I just wanted to see if that timing is still correct? And would love to know if you have any metrics to update us on for FOX Bet and how that's continued to grow? And how you kind of feel about the relationship with Flutter and some of your strategic opportunities there? And then also, as we think about long-term sports rights, you've got a lot of rights, especially digital rights. Do you see those as largely staying inside the linear ecosystem? Or do you think there is an opportunity to sub-license some of those to some of your peers who are spending a lot on their a la carte streaming products? Thank you.

Joe Dorrego :

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

Operator:

Ladies and gentlemen, thank you for standing by, and welcome to the Fox Corporation Second Quarter 2022 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and good morning, everyone. We are pleased to be with you today to discuss another really, truly remarkable quarter for Fox Corporation. In our fiscal second quarter, we delivered 9% revenue growth and 2% EBITDA growth, even while continuing to invest in our digital initiatives. These results demonstrate our ability to expand our emerging digital businesses, while focusing on delivering overall growth for our shareholders. This strategy has been unwavering and disciplined, and we have not been convinced to deviate into areas where we cannot be a leader. Our financial results in the quarter benefited from healthy affiliate revenue growth, and what continues to be, at least for FOX, a robust advertising marketplace. Our advertising revenue grew 6% versus the prior year quarter, which is notable when you consider that last year included a record net political advertising revenue of nearly $250 million. From a national advertising sales perspective, we have seen robust CPM growth and broad-based demand across most advertiser categories. This is clear evidence that our portfolio of leadership brands, which over index in sports and news continues to deliver the live audiences at scale that our advertising partners seek. To understand the scale of our reach across the U.S., you only need to look to our NFC Championship game a week ago where at peak, we had 55 million viewers tuned into the game. The overall market trends and local advertising also remain positive for us, as we achieved double-digit base advertising revenue growth in the quarter when excluding political revenue. Perhaps even more important to note, our local advertising revenues have now fully recovered from the impact of COVID and are up over pre-pandemic levels. While we continue to see softness in the local automotive category caused by the ongoing supply chain delays, this has been more than offset by growth in nearly all other categories, led by sports betting. We have already written over 50% more local sports betting revenue at this point of the fiscal year than we did across all at fiscal '21. We have seen the same local trends continuing thus far into the third quarter. Overall, our operating businesses are performing well, underscoring our unique strategy and differentiated position. Let me touch on some of the highlights. The FOX News Channel celebrated its 25th anniversary this past October by reinforcing its exceptional ratings leadership. On the same call last year, we were fielding questions about whether FOX News had peaked. For the 20th consecutive year, FOX News is the leader in cable news across the board in total viewers and the 25 to 54 demographic for both total day and primetime. Calendar '21 also marked the 6th consecutive year FOX News led all of basic cable in total day and primetime viewership. FOX News leads by wide margin, commanding a 55% share of total day cable news viewership this past quarter. FOX News's share of the younger demographic was even higher at 57%, marking its second highest quarterly share of the younger demo on record. FOX News's audience was also the most politically diverse with more Independents and Democrats tuning into the network than to our competitors. Our unmatched programming lineup continues to drive these great ratings results and bring a blue-chip roster of advertisers to the channel and its digital extensions. For example, in the aggregate across all of cable news, this past quarter FOX News delivered 14 of the top 15 programs. We simply could not be better placed as we look forward to the mid-term election cycle later this year. Meanwhile, the momentum continued at FOX Nation, which increased its net subscribers in the quarter by over 30% versus the September quarter, supported by strong fresh content to help drive higher subscriber numbers and very low churn. Additionally, FOX Weather, which is breaking through a crowded field of established incumbents is off to a great start. And its growth will continue in the current quarter as we expand the distribution of the FOX Weather live video streams across multiple platforms, including YouTube TV, Amazon news, Roku and Fubo. At FOX Sports, we also had a strong quarter led by our NFL and College Football coverage. Over the last 12 months, FOX Sports had more telecasts across the top 100 programs than any other network, let alone any other network sports division. And of the total minutes of NFL and College Football that Americans watch during the 2021 regular season, about a third were viewed on FOX. I commented on the postseason a moment ago, and by any measure, it was a great series of games for us and for the NFL. Audiences and advertisers embrace the postseason, which kept a record setting revenue full season for us at FOX and a non-Superbowl year. Demonstrating that growth and the demand, we had 21 advertisers placed in this year's NFC Championship game that were not present a year ago. The results from this season underscore the value and importance of our long-term partnership with the NFL, that will continue for at least the next 12 years. College Football, an equally impressive results. FOX's BIG NOON SATURDAY window grew by 15% over to an order [ph] 2019 season, and with an average viewership of over 5.8 million has become the number one window in all of College Football. To put the success of our College Football strategy in a proper context, in 2016 FOX's last season, prior to having the Big Ten rights, our share of College Football viewership was just 7%. Today, we have grown this threefold to a 22% share. We continue to leverage our leading sports franchises into adjacent opportunities and are pleased with progress at FOX Sports Super 6, which ended the year with more than 6 million users, up more than 20% over the prior year. In addition, this coming April, we will launch the USFL, a new innovative spring football league, which FOX will control. And again, our strategy to invest in our flagship brands and serve our loyal audiences has enabled us to realize new and exciting digital growth opportunities, and nowhere is this more apparent than at Tubi. While some companies are focused on multibillion dollar content investments in search of streaming subscription growth, to be continued its unrelenting focus on advertising video on demand with a strategic and measured investment approach. This approach has yielded solid momentum across all key revenue and performance indicators. Q2 represented to be the best performing quarter ever, and December its best performing month in the quarter alone to be achieved 54 of its top 100 revenue days, 55 of its top 100 Viewer days, and 50 of its top 100 total view time, or TVT days. Tubi exceeded 3.6 billion hours streamed in calendar 2021, marking a 40% increase in TVT over the prior year, due in large part to the breadth of its library, now at more than 41,000 titles, a quickly expanding linear news and sports offering with more than 100 channels, it's high return on investment in licensed content and original releases and its world-class technology. We chose to acquire and now operate Tubi with a single goal of winning in AVOD. There are no competing priorities internally, and no revenue transfer from other assets in our portfolio. That is to say, Tubi revenue is truly incremental to us. As Steve will discuss in a moment, our focus portfolio of leadership assets and emerging digital businesses is delivering consistent growth in a thoughtful and disciplined manner. Taken as a whole, we have the most valuable news franchise in the country, if not the world, the leading live sports franchise, and a top broadcast network reinforced by a strategic portfolio of local stations, all of which have digital extensions to their businesses. And in the 3 years since we formed Fox Corporation, we have used this collective platform to develop a rapidly growing Eva streaming business and create optionality within the sports betting ecosystem. We feel we are in a strong position and could not be more excited for the months ahead as we prepare for what should be an active and exceptional fiscal 2023 for FOX. With that, I will turn it over to Steve to take you through the quarter in more detail.

Joe Dorrego:

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

Robert Fishman:

Hi. Good morning. I've one or two quick ones on sports betting, if I can. As sports betting continues to be legalized across more states, can you just discuss how you're thinking about growing FOX Bet from here, while balancing the Flutter and FanDuel relationship? And then maybe if you can just expand on your prepared comments about the local advertising benefits as these states continue to be legalized, including maybe any early data after the January launch in New York. That'd be very helpful. Thank you.

Joe Dorrego:

Thank you. Operator, we can go to the next question.

John Hodulik:

Great. Great, thank you. Two quick ones. First on the -- could you give us a sense of where we are in the 200 million to 300 million in digital dilution for the year? I think you guys had said it would be more in the back end of the year. If you could give us a sense for where we are thus far would be great. And then any color you can give us on the recent licensing extension you guys did with Hulu, either magnitude or impact on the financials, or is there any more to come from that -- from [indiscernible] [2436] to expect?

Steve Tomsic:

Yes. So, John, we said so far this halfway sort of approaching nine digits on that investment. So, we'd expect to have a little bit more back waded in the second half. But as I've sort of pointed out in the prepared remarks, I think, likely to be closer to 200 million and 300 million for the full year from a pricing perspective on those digital investments. Probably the most sort of the focus of that investment in the back half of the year will generally be around 2 weeks. So that's what you should expect to see that in the TV segment in the second half. And then in terms of Hulu Output deal, it's a good one, but it's relatively small. It's an Output deal for Hulu to stream out of season episodes of FOX unscripted and animated series. So, it's things like, I Can See Your Voice, The Masked Singer, The Masked Dancer, in case you missed that, and animated comedy from Bento Box HouseBroken. So, I think it's something we're very happy with and happy to continue our really positive relationship with Hulu.

Operator:

Thank you. Our next question comes from Doug Mitchelson with Credit Suisse. Please go ahead.

Lachlan Murdoch:

Thanks very much, Doug. So, on the first question, the way we look at sports betting is less about what always starts from a place and less about sort of investing in sports betting. And wagering and more about the value of our existing investment in sports broadcasting, right. When you have a business, which is the leading sports broadcasting business in this country, when you look at our new, 12-year agreement and deal with the NFL and the viewership that we know, we expect to be sort of guaranteed to engage with those fans for the next 12 years. We really think about what's the future monetization of that engagement with our viewers and sports fans. So that's where we begin. We already have a multibillion-dollar investment in engagement with sports fans. What will sports fans be doing with their time? What will they be doing with second screens? What will they be doing leading into a big sports weekend? Clearly as states open up to sports wagering, wagering is going to be a major part of that journey. And it's a part that we want to -- a journey, we want to embark with them, because we think it's a win-win, it'll make them more engaged, with us more engaged with their favorite teams, and ultimately watch more of FOX Sports. So, we see it as a win-win. So, when we think about that and when we look at the sports some sort of the wagering ecosystem, what we have already with our small ownership, but valuable ownership stakes in Flutter. When we look at our option into FanDuel and our joint venture in FOX Bet, and also critically, the top of the funnel, our very successful strategy with FOX Bet Super 6, we see ourselves continuing to improve and operate those and when the right opportunities emerge and come up to continue to invest in the space. On the -- Steve, do you want to add anything to that [multiple speakers]?

Lachlan Murdoch:

Yes. Yes. And we are limited in structure to some extent because of the licensing rules. And I think I said in the last call, we're actively exploring, getting licensed, not to operate a book, but actually to potentially sort of maximize the value that we can capture in this space. So, it's something that we continue to explore. In terms of the upfront, as a -- as an overall comment, what you're seeing, I think across the marketplace is a softness in entertainment and scripted entertainment ratings, not just for us, but for all of the broadcasters. And you're seeing -- due to that softness, you're seeing major advertisers and marketers start to look at where they can capture their consumers in other places, and the -- where they're flowing to, where their dollars and marketing focus is moving towards, quite strongly is live news and live sport, and to a large extent digital, which we're utilizing to be extraordinarily well. So, when we think about the [indiscernible], when we think about that -- sort of selling season, it's early May, we leave the upfront. But between now and then we're having a majority of our conversations and with our partners will be selling as I think others will our entire portfolio of asset. So, we'll be selling the entertainment network, news, sports and Tubi in a very integrated fashion, really designed to capture our marketing partner serve money and the advertising dollars in the most efficient way. And I think we are uniquely positioned because of our leadership across new sports and digital with Tubi.

Operator:

Our next question comes from Jessica Reif Ehrlich with BofA Securities. Please go ahead.

Lachlan Murdoch:

I don't know if I can -- hi, Jessica. I don't know if I can answer the second question as well as you did in your -- in the question. So, let me start with that. I think we are looking forward to fiscal '23. We have, I think over the 2 years, we have two-thirds of our affiliate renewals up obviously with the lesser or -- the smaller renewals we've had this year are setting a tremendous benchmark for what we expect coming in renewables over the next couple of years. So, we advertising revenue with the political cycle, we expect to hit new records. I think 4 years ago we did $180 million worth of political advertising. I think we will easily number on it, but I think we can't -- it would be a guess, but I think we'll easily exceed that and break new records in this mid-term election. So, we are well-positioned I think for a tremendous victory. I don't -- can't remember if you also mentioned it in your question, but obviously Thursday Night Football was a -- an investment for us and with releasing Thursday Night Football for Amazon, I think they'll do a great job with it. But obviously there's a savings -- a significant savings there for us not having Thursday Night Football. So, we are -- we had a great quarter, great year this year. I think next year will be even better. On the USFL, we are very much looking forward to the new league. I've got actually compliment the NFL for being great partners and for helping us think through how we structure the USFL. The rules of the play is closer to NFL than the College Football where we've changed the rules slightly, it really been for Television, and for -- and so to make the game as exciting and as close the matches as possible. So, we're very excited for launching the USFL. It's always something of a league that we will control. We control the digital rights, we control every part of the game. With us and NBC as broadcasters, we think it has the best opportunity for a broad platform and the most viewers at launch. We've -- by bringing in outside investors into the league, we've effectively underwritten the investment in the USFL I think for the next 2 or 3 years at least. So, from a risk perspective, I know I think we've done it in a ambitious, but disciplined way. So, anything else?

Lachlan Murdoch:

Thank you.

Operator:

Thank you. That question will come from the line of Michael Morris with Guggenheim. Please go ahead.

Lachlan Murdoch:

Thank you, Michael. So, I'll let Steve answer the second question on the savings. But as regards to first question, we are today, this morning focused very much on broadcast television, and how we monetize our investment in sports and our sports partnerships, is really fundamentally through our partnerships with cable operators, satellite TV operators, and our local affiliates. And so, from a live sports broadcasting perspective, and it's different with some obviously, pinion [ph] and sort of shoulder programming, but from a live sports perspective, we see -- we continue to see the best way to monetize our investment in sports is clearly through our partnerships with our affiliates and our distributors. So that's our focus today. I'll let Steve answer the savings question.

Joe Dorrego:

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

Steve Tomsic:

Thank you.

Operator:

Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. I would like to emphasize that functionality for the question-and-answer queue will be given at that time. [Operator Instructions]. As a reminder, this conference is being recorded. Now I'll turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego, please go ahead.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and thank you all for joining us to discuss our first quarter results. We started off the 2022 fiscal year strongly, supported by industry-leading affiliate revenue growth, and the healthiest ad market we have seen in some time. This momentum is clearly seen across our operating businesses, which includes the return to a full slate of live events at FOX Sports, the expansion of ratings leadership at FOX News, and continued exceptional growth from 2B. Audiences are migrating to live news, sports, and streaming underscoring the operational and financial pillars that have defined our short history as Fox Corporation. This quarter continued to demonstrate the strength of our businesses, where we delivered 12% growth in top-line revenues, led by a 17% increase in advertising and near double-digit growth in affiliate revenues. On the advertising front, Fox is uniquely benefiting from a healthy national ad market where brands are increasingly seeking out engaged real-time audiences at scale that only live news and sports platforms deliver. This strong market is also benefiting Tubi and our Fox News digital assets, which provide targeted audiences to advertisers across many platforms. And despite comparisons to a heavy political ad cycle last year, our local markets are also performing well. On the affiliate revenue side, we again have best-in-class growth reflective of the power that our core brands hold in the pay-tv universe. Our commitment to keeping our highest profile content, like the NFL, exclusive to our distribution partners, gives us confidence that the healthy annual price escalators we have commanded for our brands over the past renewal cycles, will carry over into the next. While Steve will walk you through our financial performance in more detail shortly, I will now turn to the operating highlights across our businesses. You've heard it from me before, and all of our advertisers know well that Fox owns the fall through our football and baseball coverage at Fox Sports. And this fall is once again proof of that fact. NFL viewership is up across the industry. College football is back in full force. And we have just concluded a highly competitive Major League Baseball postseason. And throughout it all, Fox Sports has been expanding its live coverage to deliver viewers more of the content that they want. The NFL is off to a great start, seeing solid growth in overall viewership through the first 8 weeks of the season. Excluding a rather complicated Week 1 comparison, Fox's NFL viewership is up 8% over last year and our schedule only gets better from here. College football has also seen solid growth. By all measures, it's off to its best start in recent memory, Season to date, average viewership of our college football games on Fox is up nearly 20% over 2019. the most appropriate comparison given the postponements and cancellations that characterized last year's COVID-impacted schedule. Fox's Marquee, Big Noon Window, is averaging more than 5 million viewers, while our Saturday morning pregame show, Big Noon Kickoff, is also seeing viewership up nearly 20% over 2019 levels. Moving from the football field to the baseball diamond, Major League Baseball has been a bright spot this year. The inaugural field of dreams games, again this summer was a great success, clocking nearly 6 million viewers, and delivering the most watched regular season baseball game in 16 years. It drew viewers and mass, notably women and teens. and from a business standpoint, was the highest revenue generating regular season game of all time. This game was something that only the Fox Sports team could envision and produce, definitely tapping into the nation's desire for an uplifting event underpinned by nostalgia and optimism. We all look forward to returning to Iowa in August '22 for next season's Field of Dreams game. The momentum from the Major League Baseball regular season has translated into the post-season. And what has been a superb World Series for Fox. In fact, the World Series is the only content this season outside of the NFL to average over 11 million viewers and will easily outright the NBA finals to rank as a number 2 championship event in professional sports this year. And today, we're happy to announce the expansion of our international soccer portfolio with a landmark rights agreement for the UEFA European Championship. We will have access to more than 1500 matches highlighted by the 2024 and 2028 Euros, along with the UEFA Nations League, World Cup, and Euro qualifiers, and international friendlies. And this is on top of our existing international soccer portfolio, which as you know, already boost the FIFA Men's and Women's World Cups. Importantly, we've also acquired sports betting rights alongside our coverage of these UEFA competitions, including integration opportunities with Fox Bet and Fox Bet Super 6, which are already benefiting from our existing sports portfolio. At the end of the quarter, the user base for Fox Bet Super 6 exceeded 5 million players, making it the biggest free-to-play sports betting game in the country. Beyond our direct investments and options in the wagering area, our national networks and local stations are benefiting from the legalization of gambling across the country. Take the Fox Television Stations as an example. Sports betting is only legalized in 6 of our 18 Fox markets, and yet we have already written approximately 20% more sports betting revenue at this early point of the fiscal year than we did across all of fiscal 2021 combined. This implies that this new category will end the year as one of the largest in local advertising. Staying with local advertising, the overall market trends for us are quite positive with travel, entertainment, and pharmaceutical categories proving particularly robust. While we continue to observe some softness in automotive, this is being more than offset by growth in other areas including sports betting. Excluding political spending, our core local advertising was up again this quarter. At Fox News Media, linear and digital segments are performing very well. The Fox News Channel has further solidified its leadership position in cable news, reaching market share levels that are now at multi-year highs. In both total day and prime time, the Fox News Channel accounted for over 50% of cable news viewership during the first quarter, more than CNN and MSNBC combined. This momentum has accelerated into the current quarter, with Fox News Channel accounting for 55% of total day, and primetime cable news viewership in the month of October. And I should just state here as an aside, last night saw a viewership share of the Fox News channel of 65% of all of cable news of viewing, 65%. The first quarter also mark the seventh straight quarter of the Fox news channel was number 1 in all of basic cable for primetime. And this ratings leadership continues even into the late-night hours. Gutfeld! regularly outpaces nearly all late-night programs on cable and broadcast television. Even besting the CBS Late Show with Stephen Colbert on selected nights. At Fox Nation, the complementary streaming service to Fox News, our total subscriber count was up nearly 25% compared to last quarter, and up over 130% compared to the same quarter last year. Not only our new subscribers seeking our Fox Nation, they are also staying with the platform longer. The first quarter was Fox Nation 's highest quarter for engagement, and the best quarter for subscriber retention. The momentum at Fox Nation has continued into the current quarter with the addition of the iconic series Cops. This show, which was a staple of the Fox Network for so many years, launched on October 1st and has quickly become one of the most popular titles on the platform. And we recently launched another digital product under the Fox News Media umbrella, Fox Weather. The Fox Weather app and it's 24/7 free ad-supported streaming service debuted last week as the most downloaded free app in the App Store ahead of TikTok, YouTube, and other social media platforms. Since launch, the Fox Weather app has been downloaded over 1 million times. In just its first week of existence, users generated over 28 million-page views and spent over 42 million minutes engaging with the product. Using the strength of our national and local news operations, we are excited about the prospects for Fox Weather and our ability to be a leading player in the space, delivering compelling live content to viewers and serving as a desirable platform for advertisers to reach our valuable audiences. The Fox Weather streaming service is currently available for free on all Fox News Media digital properties, as well as on Fox Now, the distribution and availability of Fox Weather will expand in the near term, with a launch later this month on Tubi, followed by YouTube TV, and the major streaming platforms, making Fox Weather ubiquitously available well before the end of our fiscal year. Our digital strategy is focused and sets Fox apart from its media peers. Our strategy is deliberately less capital intensive than what others in the industry are currently pursuing. Our approach to investment is to develop businesses that are extensions of rather than replacements for our existing lines of business, thereby creating revenue streams that are truly incremental to Fox. Tubi is a prime example of our unique approach to streaming compared to others in the media landscape. We program and monetize Tubi in distinct contrast to the SVOD approach of many other media companies, and we are more than pleased with the results. While others compete aggressively in the SVOD space, investing heavily in content and promotion, we identified the opportunity to be a leader in AVOD, a strategy which aligns with our advertiser and audience-focused approach Company-wide. As SVOD platforms face the challenges of subscriber acquisition and retention and ever-increasing programming costs, Fox's carved out a differentiated and unique path. Tubi's measured investment in its content library and original programming is delivering solid returns. In addition to serving viewers with the content library of more than 35,000 titles, which is more than 5 times the size of Netflix's library, Tubi's unique original content strategy is already seeing early signs of success. Out of the first 4 original films to be released this year, 2 of which have performed so well in the quarter that they have already generated advertising revenue well above their local production costs. Meaning, they're already generating a positive return on investment. Tubi's deep understanding of its audience is a key asset, as Tubi original movies outperformed blockbuster movies available on the platform. The growth at Tubi continues to exceed even our best expectations for the business when we acquired. Tubi will generate significantly more revenue this fiscal year than our cost to purchase the platform in early 2020. In the first quarter of the fiscal year Tubi more than doubled its revenues year-over-year. And total view time on the platform, TVT, [Indiscernible] metric, continues to climb with 30% growth compared to last year. Fox 's content and reach have supercharged to recent revenue and audience. News on Tubi, at collection of 70 news channels, is anchored by live news from the Fox Television Stations and has drawn viewers for increasingly long periods of time. Since launching last fall, News on Tubi viewership has grown over 130%, and Tubi continues to expand its linear offerings with our recent launch of Sports on Tubi, which further leverages Fox's content expertise with premium sports channels, including Fox Sports, the NFL Network, and the MLB network. Also, Fox Entertainment recently acquired TMZ. The acquisition of TMZ fits perfectly with our focus on live programming, and give us -- gives us an array of possibilities to rapidly expand our brand and platform that have long been one of the cornerstones of our local TV stations. Fox Entertainment is focusing on bringing the TMZ brand to all parts of the Fox portfolio. including further monetizing the TMZ brand across the Fox TV Stations, developing TMZ branded content for Tubi and amplifying TMZ 's digital presence. Finally, and this is just a lot of fun, we are very pleased with the early results of our investment in Blockchain Creative Labs. Through this investment, we own a share of the underpinning marketplace and wallet technologies that power these next-generation experiences. We recently launched the MaskVerse alongside the current season of The Masked Singer, in which fans of the show have downloaded over 120,000 NFT packs and created over 100,000 wallets on the platform. We look forward to the expansion of this business through our NFT partnership with the WWE. This further highlights the marketing power of the Fox broadcast network to drive new businesses and the creative and entrepreneurial spirit of all of us here at Fox. Clearly, the fiscal year is off to an excellent start and we are encouraged by the outlook for the rest of the year. Our strategy to focus on the broadcast of live event programming that audiences crave, like sports and news, which coupled with the addition of Tubi, puts us in an enviable competitive position. This intentionally differentiated portfolio and approach will further propel our growth and drive exceptional value for shareholders. Now, Steve will take us through the financial details of the first quarter.

Joe Dorrego:

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

Alexia Quadrani:

Thank you. My one question is, and maybe on the sports side. Can you talk a bit about how you can -- how you will -- your ability to leverage more your incredible brand you have in sports, and all the rights that you have in sports longer-term? Is there a consideration of a greater digital strategy beyond what you're already doing with Tubi?

Joe Dorrego:

Operator, we can go to the next question.

Jessica Reif Ehrlich:

Hi, I have one multipart question, of course.

Jessica Reif Ehrlich:

Hi. So, this is a news question. So, the 65% share late-night is pretty astounding. But even before that, the -- there's been a record amount of money raised from both parties before the election, and after yesterday is probably a lot more to come. So, I guess the question is, can you talk about monetization across your various assets, Fox News and TV. Does it -- the second part of that is just measurements been a real issue for everybody. Does that affect your news, like how you monetize news? And then I was just -- since you brought up News on Tubi, and just on content in general, I guess. Can you just talk about your outlook for how Tubi's content profile will change in the coming year? Thank you.

Steve Tomsic:

Billing of the Tubi content.

Joe Dorrego:

Operator, we can go to the next question.

Benjamin Swinburne:

Thank you. Good afternoon. For any of you, there has been obviously a lot of focus on the ad market and the potential supply chain issues for some verticals. You guys didn't mention any of that, so I'm just wondering if you're seeing any softness in the television market sitting here as we head into the holidays. And I was just curious on Tubi, if you had international plans that you'd want to share with us on taking that platform overseas in a substantial way over the next couple of years.

Joe Dorrego:

We can go to the next question.

Robert Fishman:

Hi. Good afternoon. If I can follow up on sports with your UEFA deal. Can you discuss how you see the ROI for incremental sports rights, and whether you plan to monetize UEFA on Tubi. And if not, how does your focus on keeping the rights exclusive to the pay TV ecosystem help with these negotiations or future negotiations.

Joe Dorrego:

Operator, we can go to the next question.

Doug Mitchelson :

Thanks so much. And good afternoon, everyone. I guess my question and my follow-ups, I'll just throw it away. Lachlan, how tough of funnel doing for Tubi versus that 30% growth in usage? I know you always highlight that it's growth in usage that really matters but the measure of the health, we still need to understand whether you're attracting new users of Tubi and what marketing and distribution levers are left to pull to continue to scale that business. And then for John, we've talked in the past about visibility for core costs for the Company, and we've had obviously these huge pandemic swings. But I'm curious if you exclude investment spending and unusually like Super Bowl and Thursday Night Football exit. Can you help us understand what the core OpEx growth looks like for your linear network businesses, because I think we all have views as to what advertising affiliate revenue on a core basis will look like going forward? And then lastly for Steve, can you monetize these higher NFL ratings or was that all sold upfront. Thank you.

John Nallen:

Hey, Doug. Yeah, well. Doug, I'll just comment on the cost overall and let Steve take some of the details. But the -- probably at the heart of your question is the visibility we have over our cost profile, our cost envelope. And

Joe Dorrego:

Operator, we have time for one more question.

Steven Cahall:

Thanks. I just wanted to ask about Fox Bet and Super 6. Thanks for that data point on Super 6 with the $5 million. I was wondering if you could give us any metrics around Fox Bet. I know you seeing Super 6 act as a strong funnel for conversion from free-to-pay. And I know you are a passive, I guess, sort of participant in Fox Bet. How should we think about you may be using your sports rights to make that more of a differentiated platform, or also taking more of an operational role so that it might start to show up in the financials at some point. Thank you.

Joe Dorrego:

At this point, we're out of time. But if you have any further questions, please give me your [Indiscernible] carrier call. Thank you once again for joining today's call.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter of 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 functionality for the question-and-answer queue will be given at that time. [Operator Instructions]. As a reminder, this conference is being recorded. I'd now turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and thank you all for joining us to discuss our fourth quarter and fiscal 2021 results. At the outset, I want to emphasize the exceptional financial and operational results that we have delivered over the last year despite the challenges posed operating through the COVID-19 pandemic. The virus brought significant impact to our productions, to our processes and to our people. However, we stayed resolute and focused and demonstrated that, even in the most unexpected and challenging of times, our focus on a handful of powerful, highly engaging brands produces exceptional results. Over the past fiscal year, we have reinforced the competitive advantages of our core brands, enhanced our digital capabilities, solidified our growth potential, returned $1.25 billion of capital to shareholders through buybacks and dividends, and otherwise prudently allocated our capital. We have a strongly differentiated position in the market, which continues to benefit us to no end. But our greatest strength is our people who have really stood up this year and performed extremely well under such difficult circumstances. I know myself, my father, the board, and the management team appreciate all their hard work and all their achievements this year. In fiscal 2021, we generated revenue and profit which exceeded even our own bullish expectations. Our affiliate revenue increased 9% year-over-year, which is net of the distribution credits that we recognized last fall due to COVID. Our advertising revenue was up 2%, which is tremendous when you recall that we broadcast the Superbowl in the prior fiscal year, during which we generated around $500 million of net advertising revenue. Importantly, the fiscal fourth quarter saw these trends accelerate, as quarterly revenues increased 20%, led once again by double digit affiliate revenue growth and advertising revenue growth of 38%. This growth was underpinned by the ability of our core businesses to consistently deliver audiences at scale and capture the upward momentum of a rallying advertising market. We finished the fiscal year with historically strong upfront sales and are currently also enjoying sustained scattered demand with pricing at significant premiums. We finished the fiscal year strong and we feel we are in a very good place – or we are in a very good place with great momentum starting the new fiscal year. FOX News Media continued its ratings leadership and its multi-platform growth in the fourth quarter. The FOX News channel was the most watched network in primetime across all of basic cable for the sixth consecutive year, and notched its 78th straight quarter as the leading cable news channel in total viewers. While the year-over-year ratings comparisons are difficult due to last year's heightened news cycle, the FOX News channel has retained more of its audience than CNN and MSNBC since the presidential election. In fact, since the election, FOX News has solidified his leadership position in cable news, having reasserted its pre-election market share. For total day audiences, FOX News increased its market share by 11% in the fourth quarter compared to the prior year, while CNN and MSNBC lost 9% and 3% respectively over that same period. From a primetime perspective, we once again find ourselves in a familiar position, as we routinely see our ratings exceeding those of our peers combined. We were also pleased with the performance of FOX News Media's digital assets. FOX News remained the most engaged news brand across social media channels, extending this run to nearly seven consecutive years. This is a critical pathway to reaching, engaging and growing the broadest possible audiences with the FOX News brand. On the last call, I told you that Fox Nation, the direct-to-consumer offering from FOX News Media had recorded its strongest quarter for customer acquisitions since launch. And this quarter, thanks to new and expanded content offerings, Fox Nation once again notched its best-ever quarter for customer acquisitions. Later this year, we will expand our FOX News Media portfolio further with the launch of FOX Weather. FOX Weather is just one example of how we plan to grow the FOX News brand across multiple verticals. And the power of our brands and the growth potential of their digital extensions was also on display at the FOX Network, with another round of ratings wins on broadcast and record breaking results at Tubi. FOX is the home to the best entertainment programs in television, which together with sport, helped propel the FOX Network to its second consecutive broadcast season as the top network in primetime among the key demo, adults 18 to 49. This fall, we have strongly performing returning hits and a slate of promising new shows. In particular, we are looking forward to the addition of two new dramas to our full lineup. These are The Big Leap and Our Kind of People. Fox has always thrived with shows featuring music and dance and The Big Leap, like Glee, and so many others before, lives right in that sweet spot. The big leap is an optimistic dramedy about second chances and chasing dreams. We think these themes are spot on coming out of the pandemic. Our Kind of People is inspired by Lawrence Otis Graham's book of the same name. It is executive produced by Empire creator Lee Daniels and stars Karen Gist. It's an absorbing story that takes place in the aspirational world of Oak Bluffs on Martha's Vineyard. And I'm very pleased today to announce a new partnership with Gordon Ramsay, Studio Ramsay Global, which will acquire Gordon's current television business and will develop, produce and distribute new culinary and lifestyle programming across all Fox platforms, including TV. Now, let's take a moment to talk about Tubi. At the end of the fiscal year, Tubi be surpassed 3 billion hours streamed, up more than 50% over the prior year. During the recent June quarter, total view time surpassed 900 million hours, up more than 40% over the prior-year quarter. We spoke about it together last quarter. But I cannot emphasize enough the importance of total view time, or TBT, as the critical metric for ad supported streaming. It is the best measure of burgeoning engagement on Tubi and correlates directly to the monetization of the platform. And there's no shortage of great content to keep audiences watching. Tubi leads the industry with the largest library of content, with more than 35,000 movies and TV series available. And that library continues to expand with Tubi's first original movies, exciting genres that are informed by Tubi's machine learning capabilities and supported by tight production budgets. In just weeks, these titles have exceeded our financial and strategic objectives. Throughout the fall, we will modestly ramp the launch of Tubi Originals, a number of which will be produced in house by Fox Alternative Entertainment and our animation studio Bento Box. But let me be crystal clear about one thing. Tubi's original programming strategy is very different from the strategies of an SVOD streamer. We have no interest or plans to invest in high cost programming to drive subscriber acquisition as we are not in the subscriber business. We are focused on delivering programming that drives total viewing time and hence monetization in very short order. The return on our programming investment is measured in weeks, not years, and should be viewed through a completely different lens than investments in the SVOD universe. We are in a very different space. It's a space focus on advertisers. And advertisers are increasingly seeking out Tubi as a leading platform to reach a younger audience that is both largely unduplicated from our traditional Fox audience, and not regularly streaming other AVOD services. In the recent quarter, Tubi featured ads more than half of the Ad Age Top 200 Brands. With the reach and brand recognition of Fox behind it, Tubi be nearly double the number of brands buying its inventory in the upfront and more than tripled its upfront dollar commitments over the prior year. Despite the COVID-related headwinds earlier in the fiscal year, Fox television stations recorded core advertising revenue that was on pace with the prior year when excluding the Super Bowl comp last year and the record political revenue in the current year. Just one example, the adoption of legalized gambling is driving increased advertising spend, particularly in Philadelphia and Detroit. We anticipate additional markets, including Arizona and Wisconsin, to launch legalized sports betting in fiscal 2022. The Fox television stations are particularly well positioned to capitalize on this opportunity, given the strength of our stations in these markets. FOX Sports also had a noteworthy year, expanding its ratings dominance in live sport, while also extending and enhancing our long-term rights agreement with the NFL. We will remain not only the leader in football ratings, but also the home of the premier NSU rights package through the 2033 season, thanks for our new multi-platform rights deal with our partners at the NFL, which includes the designation of FOX Bet, as an authorized sportsbook operator of the league. We expect the company-wide momentum of fiscal 2021 to carry into our current fiscal year. Macroeconomic trends bode well for a strong advertising market and brands are increasingly turning to our linear and digital assets to reach the largest collection of loyal and engaged viewers. The return of normal sports and entertainment schedules, coupled with the ongoing leadership of FOX News Media, will enable us to capitalize on the robust ad market. In addition to delivering strong underlying operating and financial results in fiscal 2022, we are focused on expanding our digital businesses. We are reinvesting a portion of the profits and free cash flow from our core businesses into the high growth and high opportunity digital assets that we know to be essential elements of our future. This past quarter also saw the completion of a wide range of transformational technology investments that provide us with a range of modern, state-of-the-art platforms that will power the growth of our businesses for years to come. These new capabilities include a new distribution and streaming operation in Arizona, through the brand new data and advertising platforms that will underpin and evolving an advanced set of commercial offerings for clients across all of our products and services. These investments, now complete, position a strongly to seize on the growth opportunities that lie ahead. We continue to deploy capital in a responsible manner to support Tubi, the FOX News Media digital properties, including Fox Nation and the launch of FOX Weather, as well as our other emerging digital businesses. We believe these investments, relatively modest compared to those being made by our peers in subscription streaming areas, will yield long term significant returns and position us well to continue to adapt, and take advantage of, the evolving media landscape. Now, Steve will take us through the details of the fiscal year and the fourth quarter.

Joe Dorrego :

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

Jessica Reif Ehrlich:

I have a follow up and then a question. So, my follow-up is, you've laid out, Steve, in particular, towards the end, your investment priorities for fiscal 2022, including digital assets and originals, etc. If you can clarify, is this the peak year of spend and whatever you can say about sports rights and sports betting as part of this investment year would be helpful. But even with all of that, you still have an incredibly strong balance sheet. So, do you feel like you need to get bigger? And then my question is, you've had a great – really fantastic upfront, as big as the whole industry has had, can you give us color on pricing and sell out pretty much across all of the assets, not just the network, but the cable assets as well as Tubi.

Operator:

We have Robert Fishman of MoffettNathanson.

Lachlan Murdoch:

Let me start with how do we look at the ROI on the content and then we can get into the margins and maybe Steve can take the financial aspect of that question. So, when we look at Tubi content, from an AVOD perspective, and as I mentioned in my prepared remarks and I've mentioned last quarter, it's all around total viewing time and the advertising impressions that we can generate through increasing and expanding the engagement as measured through total viewing time. And it was really pleasing that, I think, in the fiscal year, we did 3 billion hours of total viewing time, which was up 50% year-on-year. So, the way to grow, obviously, total viewing time is we can grow viewers and multiply that by the amount of content and the length of time they're spending watching that content. And we look at the content, and basically, I'd say, five different categories. There's your third-party content. And that's where we have 34,000, 35,000 hours of library, which is growing. So, there's that third-party content. That's a mixture of a revenue share and sort of licensed content. There's an increasing amount of Fox-owned content and IP that we're able to put on to Tubi, which is really pleasing to see and I think helps drive the TV awareness and the brand. There's the news category, which is really starting to take shape and increase engagement. There's a sports category, which will be launching sports channels soon, including the NFL channel and some other sports. And then finally, there's Tubi Originals. And Tubi Original has only just begun to launch, but we are seeing the return in a very short order. These movies are very price effective. And we're able through Tubi's technology to really target them very specifically to very well defined genres that we know, if we promote them correctly on the Tubi platform, they will drive a consistent, expected amount of viewing, which we can then monetize very efficiently. So, the model from the investment into the original programming is really derived specifically by the exact amount of revenue that we can derive out of that original program. Unlike SVOD where you're creating original programming to pull subscribers in, often once they're in the platform, they don't watch that program or they watch other library programming, we're not interested in the subscriber acquisition. We're purely interested in the time they spend on the platform and the amount of content they're consuming. Steve, do you want to talk to the margins?

Operator:

Next, we have John Janedis of Wolfe Research.

Lachlan Murdoch:

In terms of the investment going forward, as mentioned in my prepared remarks, the big investment in terms of our – partially, in terms of our linear business from a technology point of view has been this Arizona play out and data center, technology center, which is now completed, and that brings us into – I think they are our best-in-class kind of infrastructure for all of our products. Obviously, that's built today to be multi-platform. So it's an investment both in the linear business, but also as importantly in the digital businesses as our digital business continues to grow. The $200 million to $300 million that Steve has called out in terms of the investment this year, further investment in our digital assets is really split between – I think Steve mentioned Fox Nation, which is a subscription service, but continues to grow engagement, has really tremendously low churn and remains kind of a fantastic conversion rate from trial users to paid users of well over 80%. FoxNews.com, we'll continue to push into new verticals of content. They're planning and exploring content around sort of real estate, around cooking, around sort of some engaging games and crosswords and things as we drive the Fox News brand into sort of more lifestyle categories. And Tubi, I think we've addressed. So, those are the key areas of the investment this year, not the linear businesses. In AVOD, Tubi, in terms of how we price the upfront, I think the important thing for us – and I can't talk to our competitors and I wouldn't know – but the Tubi revenue in our upfront is entirely incremental, right? And that's really important. We're careful to not move revenue from one pocket to another and say, look at all the revenue we've been able to attach or push in Tubi. But Tubi revenue is entirely incremental to what we otherwise sold on our linear assets. And that's a really pleasing thing to see. Because of the way Tubi is structured with our programmatic advertising, in fact, we get a very high rate for our programmatic advertising on Tubi. And so, we were careful actually to constrain ourselves somewhat into what we sold into the upfront for Tubi because we feel towards – as the year progresses, we'll do extremely well through our programmatic advertising and the CPMs we get through programmatic. So, when we hit the triple revenue mark in the upfront for Tubi, we decided that was enough, we would stop there, and we would leave plenty of impressions for programmatic which I think is the right strategy for us.

Benjamin Swinburne:

Steve, you mentioned renewal cycle starting again in fiscal 2023. And you guys were really helpful back at your initial Investor Day in kind of helping us think about the timing of that over the course of the next few years, which you're now wrapping up. I don't know if there was anything you could help us in thinking about the cycle that starts in 2023, if it looks like the last one in terms of the curve or anything you would add. And then, on Tubi, I don't know if this is for Lachlan or whoever wants to take it, maybe you could just give us sort of the pitch to advertisers who have a number of AVOD or FAST options, including buying, I think, Tubi inventory through people like Roku and Vizio and stuff, what is it that you offer an advertiser that's better or differentiated from Pluto or Hulu or even buying AVOD inventory through one of the platforms that have an ability to aggregate an even larger audience and maybe more specific data? Would just love to hear more about how you guys go to market?

Steve Tomsic:

Exactly. You're bang on. Really like single digits this year, mid-30s the following year. Then 2024, again, mid-30s, and then about a quarter the year after that. And remember that the 2023 renewals will largely hit us – will give us the benefit in terms of affiliate revenue growth in the back half of that fiscal year.

Operator:

Our next question comes from the line of Doug Mitchelson of Credit Suisse.

Lachlan Murdoch:

I think the first question or clarification or follow-up first, the answer is yes, that the Tubi investment is subscriber acquisition, marketing, which obviously feeds into subscriber acquisition, and technology spend. So, that's the majority of the investment in Tubi. Am I wrong, Steve? I hope not.

Lachlan Murdoch:

I'm glad I was right on that. Look, on NFL, pre-sales NFL is selling very well. CPMs are strong, positive. And we couldn't be more pleased with the sales there. We think for a lot of issues in the marketplace, we think scatter pricing as well is going to remain a robust pricing through the end of the year just because of the availability of spots across the kind of television universe. So, we're confident in a very strong NFL year. By the way, I didn't mention this – it's not NFL, but on the sports side, the All Star game from Major League Baseball was a terrific revenue result for us nationally. But interestingly, locally, in Atlanta, we generated a really extraordinary amount of political revenue on that local station for the All Star game, which was obviously driven by the controversy around Major League Baseball moving the game from Atlanta, to Denver. And that political advertising was all focused on the midterm elections next year. And so, when we look at that, the lessons I think we're taking from that is that the next political season, the midterm season is going to be another record political season next year. It's not this year, next year, but we're going to see staggering amounts of political dollars flowing into these local stations. And we can see that from simply just the one example of the Atlanta station for the All Star game. On CNN, CNN+ I think it's called, look, we think it's a – what's the word when someone copies you, it's the best form of flattery. We think Fox Nation continues to grow. We think we're doing all the right things with Fox Nation. I talked about it before, but tremendous growth in the quarter driven off of clever acquisition and clever high quality programming. So, we don't see CNN launching into that space as anything other than am affirming of our strategy and what we're doing, really driving the engagement and the tremendously high engagement from FOX News into a paid for subscription service. When we look at our competitors, we are heartened by their ratings trends. As I mentioned in my prepared comments, we are now regularly beating both the combined ratings on primetime, and many times in all day, of CNN and MSNBC combined. If you take just last night as one example, ratings just dropped half an hour or so ago while we're on the call, in primetime, FOX News did 2.4 million on P2+. CNN under 750,000 and MSNBC under 1.2 million. So, you've got 2.4 million versus 1.9 million, 2 million. So, we beat them combined, plus with a margin of 20% or so. So, very strong ratings trends, very strong engagement with our audience. And that really goes through our whole digital strategy, how do we take that audience and take that engagement and expand it across multiple platforms.

Operator:

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

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Third 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 the functionality for the question-and-answer queue will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon. And thank you all for joining us to discuss our third quarter results. Once again, we have delivered a quarter of exceptional financial results, underscoring our ability to execute on our operating plan while making great progress on our longer term growth initiatives. Financially, we generated approximately $900 million of EBITDA, nearly as much as we did in the prior year quarter, when we had the benefit of a record breaking Super Bowl on Fox. This past quarter, our total company affiliate revenues increased by double-digits, once again, highlighting that our set of essential brands coupled with a focused strategy yields consistent industry-leading results. Our advertising performance was equally notable, despite the tough Super Bowl comparisons in the prior year, as we continue to see robust advertiser demand for not only our national and local in your assets, but for Tubi and our broader digital portfolio as well. Steve will give further details on these and other financial highlights in a moment. Over recent quarters, market commentary has indicated a focus on ratings trends at FOX News and on the outcome of renewal negotiations with the NFL. Our achievements in these areas are entirely consistent with the positive expectations that we have long been communicating to you. Our clear leadership and news coupled with the long-term renewal of the NFL provides a strong foundation to grow our company for years to come. Let me address each one of them individually. We have for the last several quarters being exceptionally forthcoming and utterly transparent about our expected outlook for FOX News ratings throughout the election cycle. Last November, immediately prior to the presidential election, we shared our belief that post-election the appetite for news would moderate and that a proportion of the record audiences that we were seeing would migrate back to the comfort of sports and entertainment content. At that time, what we did not anticipate was the short but heightened news cycle that immediately followed the election and that clearly benefited our competition. Last quarter, we experienced the post-election audience pullback that we anticipated. We also shared our confidence that the overall news audience would normalize back to pre-election levels. Through maintaining our dedication to providing America's best news, analysis and opinion, we had no doubt that the FOX News channel would regain its cable news ratings lead. I'm pleased to report that what we have shared with you over the last two earnings calls is precisely what has transpired. Since the second impeachment trial, FOX News regained its leadership position and maintain that leading spot ever since, averaging a 40% share of total day in primetime cable news audiences. Over this time, FOX News audience levels have held relatively firm when compared to our competition that have seen their audiences dropped significantly. With MSNBC losing approximately one-third of its audience and CNN losing over half over half of its audience. In fact, the FOX News channel finished this last quarter as the most watched cable network in primetime and finished March as the most watched cable news network overall. Calendar year-to-date, the FOX News channel is again the top rated cable news network and achievement that reflects a return to the leadership position that we expect not just to maintain, but to grow. Fortifying the success are the long thought out programming changes that we started implementing following the election and that have continued over the past several months. In April, the FOX News channel debuted the late night program, Gutfeld!, the exclamation mark is apropos as since its launch, the show is average over 1.5 million viewers per night, representing a 25% increase in the 11:00 PM to midnight time period versus the month prior. To put this into context, Gutfeld! is drawing an audience that is roughly the same size as Jimmy Kimmel Live! and larger than The Tonight Show, despite FOX News reaching fewer households than the broadcast networks. Our success at FOX News Media over the past quarter is not limited to our cable networks. FOX Nation, the direct-to-consumer offering from FOX News Media also had an impressive quarter, with the highest number of customer acquisition since launch and this momentum, which has carried over into the current quarter. Since mid-February, FOX Nation has seen a 40% increase in subscriber growth. The key drivers of this growth are the streaming of live events and the premier of exclusive flagship content, including the streaming of CPAC in February and the launch of Tucker Carlson content, including a new video of podcast series entitled, Tucker Carlson Today and long form documentaries entitled, Tucker Carlson Originals. Given the success that we have seen with this content, you should anticipate us to continue to invest in new programming for FOX Nation in the quarters ahead, to further increase engagement with our current subscribers and to attract new customers. Turning to the other important business development, I mentioned, we are immensely pleased with our renewal agreement with the NFL. Fox will continue as the home of the Sunday NFC package, the most valuable rights package in the NFL portfolio for the next 13 seasons. Just one reference point of its value to Fox. The Sunday NFC package has been the most watched NFL package for the past 15 years. Our NFC coverage is an important foundation for the FOX Network and strategically aligns with our local stations where we own and operate the Fox affiliate in 14 of the 16 NFC markets. Maintaining the Sunday NFC package is a significant programming milestone for our own stations and their local business partners and for our national affiliate base as well. In addition to our NFC package, we also added new and exclusive holiday games and secured rights to broadcast four of the next 12 Super Bowls. Fiscally, we are very comfortable with the scale of the new rights package, coupled with our decision not to renew the Thursday-night package. While we could not discuss this while we were in negotiations. Our intent was always to release Thursday-night and focus our future NFL investment solely on Sunday afternoon. Not only will we exit Thursday-night, but we also took the opportunity to do so one year in advance of the expiration of our existing deal with Amazon, assuming the rights to the 2022 and 2023 season or 2022-2023 season. Importantly, our NFL renewal also broadens and enhances our package of digital rights, providing us with the necessary flexibility and optionality to maximize all linear and digital opportunities in the future. Regardless of the way our businesses may change, our rights package provides us the ability to continue to evolve our business model. For example, we'll be increasing our digital programming right away by using our expanded digital rights to launch an NFL branded VOD channel on Tubi this coming season. Another important element of the new NFL deal relates to FOX Bet. Fox extended its rights to continue supporting America's leading free-to-play wagering game, FOX Bet Super 6. Additionally, FOX Bet has been designated an authorized sports book operator by the NFL. And we hope to share more details on the launch of NFL related integrations in the quarters ahead. The opportunity presented by uniting a leading media brand with prominent betting assets and influencers is tremendous. We continue to see substantial growth and revenue upside in this market and are investing to further expand and enhance our presence. Today, I'm pleased to announce an agreement to acquire Clay Travis' leading sports news and opinion platform, Outkick. Outkick is a natural compliment to several of our brands. And we'll deepen our investment in the sports wagering ecosystem. As a leader in sports opinion and pop culture content, Outkick provides clear overlap where their businesses and areas of expertise. Importantly, Outkick also creates content about sports wagering. And currently has an exclusive marketing arrangement with FanDuel that has proven remarkably successful. I want to welcome Clay and the Outkick team to Fox. Speaking of successful sports wagering businesses, we highly value our various partnerships with the Flutter Group. Currently, we are both looking to clarify our ongoing arrangements through a pending arbitration. While the arbitration process is ongoing, we do not expect to make any further comment about it. Turning to a couple of other areas. The harmonious mix of leading sports and entertainment on the FOX Network continues to prove a winning combination. Season to-date, Fox is the number one broadcast network for all primetime programming. FOX Entertainment programming, such as top unscripted shows like the Masked Singer and I Can See Your Voice and leading dramas like 911 and 911

Joe Dorrego:

Thank you, Steve. And I’d be happy to take questions from the investment community.

Alexia Quadrani:

Yes. Really circling back to the decision to get out of Thursday Night Football a year earlier. I'm curious what kind of programming you plan to replace it with? And then more generally speaking, what other sports rights would make sense for you guys in terms of potentially adding to that portfolio?

Alexia Quadrani:

And in terms of other sports rights, you might make sense for you guys to look at or are you very happy with the NFL and NTL and the other sports you already have, and there is nothing else?

Alexia Quadrani:

Thank you.

Operator:

We have a question from the line of Ben Swinburne with Morgan Stanley. Please go ahead.

Lachlan Murdoch:

Sure. So thanks, Ben. Thanks for the question. So first of all on Tubi, the programming strategy at Tubi is entirely as we've discussed and this is a critical difference between Tubi and certainly other subscription video on-demand services and the hybrid advertising into a subscription video on-demand services that we see our competitors operating. And the Tubi is entirely focused on total viewing time. And the reason we're entirely focused on total viewing time is because that translates directly into revenue. So the more we can grow total viewing time and this is as opposed to purely users or and as far as service subscribers, the more we can grow total viewing time, we can translate that very directly into increased advertising revenues. And so, when we look at our programming strategy, we're not interested in spending billions of dollars as the others are on sort of driving subscriber basis with very expensive programming. What we're interested in doing is very efficiently scaling our programming to drive our total viewing time. And we can do this because of the technology, we can really target specific genres and specific cohorts of our viewers to drive their total viewing time, and hence drive revenue. So it directly correlates with it, so we've had a record total viewing time in the last months and it completely correlates with having driving record revenue. So that's a business model and that fits into the – sort of the efficiency of our programming strategy. To the second question, in terms of where we moving money from one pocket to the other, absolutely not. I don't know, well, I'm sure you did have the opportunity to watch the Tubi presentation at the new fronts just a few days ago. What Tubi allows for us and frankly for any advertiser that's also advertising at broadcast, it allows them to increase their reach dramatically. The advertisers are trying to reach new viewers and viewers that don't traditionally watch broadcast, they're younger, they're more diverse, they really need to go to Tubi to reach those audiences that can't reach them anywhere else. So what that allows us to do is really expand both the amount of the partnership, the scale of partnership with our current advertisers, but also find new advertisers that we haven't enjoyed our relationship with before.

Operator:

Our next question comes from the line of Jessica Reif Ehrlich with BofA Securities. Please go ahead.

Lachlan Murdoch:

Thanks, Jessica. I lost track of how many questions it was. So if you could – if I forget any, please remind me, it's good to hear your voice. So first on Tubi and I think it was the further investment in Tubi. We're really focused on being very efficient, being very disciplined around an investment in Tubi, while at the same time not losing sight of the immense opportunities that the Tubi is. I think we've designed our programming strategy and our marketing strategy around that. So a lot of the investment you will see will be accommodation of continuing to assign the revenue and what would have been sort of profitability of Tubi back into growing the business and adding some modest for capital in addition to that. So it's not a tremendous sized investment when it comes to sort of the scale of a Fox, but we think it's appropriate, given the opportunity that Tubi presents us. On Thursday Night Football, I think you asked what the effect on retransmission would be, the logic behind being able to release Thursday Night Football, not to follow it in the new deal and indeed to release it a year early is that we don't think it gives us incremental retransmission revenue above what we already get for the premium NFL package in the country, which is Sunday afternoon NFC package. So due to that, we can really save the cost of the Thursday Night Football package and invest further in Sunday, retaining all of our potential retransmission revenue through Sunday football. On sports betting, there was a couple questions, but I think the impact of sports betting and on the ecosystem sports betting in every market where there is licensed operators, they are spending heavily which is a terrific benefit to our station groups. We think this will continue. It's a very competitive market and this won't ameliorate anytime soon. And all the more reason why we consider further investment in Outkick is a great example is sort of a leading operator in both sports news and critically in sports opinion. You haven't seen Outkick or listened to any of its podcasts or radio shows or been through its website. You should, it's really a unique and special voice. And I think the one that aligns with the Fox audience incredibly well. So we're very excited to bring that team to be a part of ours.

Operator:

The next question is from Robert Fishman with MoffettNathanson. Please go ahead.

Steve Tomsic:

Yes, so we are very mindful of the exclusive value of live NFL on broadcast television. And we're very mindful of the value that that attributes to both our O&Os, and also to all of our highly valued affiliates. So we don't have a – on a streaming service behind a paywall where we would currently put a similar cast of our NFL games. And we have no plans currently to do so.

Operator:

We have a question from the line of Doug Mitchelson with Credit Suisse. Please go ahead.

Lachlan Murdoch:

Thanks, Doug. Yes, look, a huge part for us, and I can't speak for anyone else, but of our negotiations with the NFL in particular, because this is such a long-term deal was making sure we had the flexibility going forward to monetize these rights in different ways. And it's hard enough to think or to predict five years or six years out rather than sort of 12 years or 13 years out. And so we made sure we had every ounce of flexibility within our rights package to be able to evolve our business model and monetize these rights going forward. Having said that, today clearly the best monetization, the best opportunity to monetize the rights are through broadcast television, both with our owners and our affiliates. And that's really where our focus is.

Operator:

We have a question from the line of Kannan Venkat with Barclays. Please go ahead.

Lachlan Murdoch:

Thank you very much. Look, I think our so-called legacy television businesses are all very healthy and we expect it to grow them significantly. But when you look at them from a point of view in terms of how we grow and how we – I think you used the word pivot, our business model going forward. You have to look at what they can offer in broader – with broader opportunities to monetize their existing content, right, and their existing genre of content. So if you look in the sports business, the sports business is really what's driving our wagering business, right, on our betting business. You're going to see us be really one of the major players, certainly from a media point of view in the sports wagering business in America, going forward, we're going to continue to exploit that marketplace and to grow in that marketplace. And that's really driven off the – our engagement with our audiences through our sports broadcasting business. We wouldn't have nearly the opportunity I believe in wagering, a stand-alone without coupling it with the FOX Sports and overall Fox brand and Fox audience. And this can be seen very clearly through our success with our FOX Bet Super 6. FOX Bet Super 6 in the last year, we grew very aggressively through marketing it across all of our platforms, FOX Sports, FOX Entertainment, FOX News. And we drove to over five million users. There was no other free-to-play game like that and at that scale in the United States and what that allows us to do with FOX Bet Super 6 obviously, is in the markets where we're licensed, drive that traffic or drive that sort of the widest part of that funnel into sports wagering and also the poker and casino businesses where they're licensed. So there's a tremendous opportunity there, but it's really because of our strength in our traditional sports broadcasting business. The same thing by the way is true at FOX News, we branded the FOX News business, FOX News Media, I think a couple of years ago. And that's really because you can't look at FOX News anymore as just a linear cable channel. The opportunities of FOX News to grow revenue beyond the impressive growth within cable is really through it's powerful website, it's podcasting, FOX Nation, new channels like FOX Weather. We're seeing a tremendous opportunities to expand its reach and the power of its brands.

Operator:

Ladies and gentlemen, that does conclude our conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.

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. [Operator Instructions] As a reminder, this conference is being recorded. I’ll now turn the conference over to Chief Investor Relations Officer and Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good morning and thank you all for joining us to discuss our second quarter results. Financially and operationally, we continued our impressive results and strong momentum in the quarter with EBITDA growing by 17%, driven by revenue growth of 8%. These financial results were led by exceptional gains in advertising revenues, which grew by 14%, spurred by record political cycle, in which we generated more than $420 million of net political revenue company-wide during calendar 2020. The overall advertising strength was propelled by our FOX Television Stations, gains at FOX News Media, and the dramatic growth of Tubi. Beyond advertising and because of the substantial pricing power of our brands, our affiliate revenues grew by 6% despite a reserve taken for potential distribution credits. While we experienced a decline in subscriber volume, the trend improved for the third consecutive quarter. This quarter, we saw industry subscribers declined just above 5%, which is more than a 50 basis point improvement from what we experienced in Q1. The financial performance of Fox is illustrative of the strength of the core brands that anchor our company and of the contributions of new assets to lay the groundwork for continued growth and rapid evolution. As you know, the new cycle over the last year has been quite active and it has led directly to gains across our local stations as well as all the networks and all the extensions of FOX News Media. For example, Fox’s ability to provide the best in local news was on full display at FOX 5 Atlanta during the Georgia Senate runoffs. Not only did our colleagues at FOX 5 report on the national significance of the Georgia election, they also expanded news coverage in response to viewer demand, held a candidate debate and produced special runoff programming focused on the issues impacting Georgia voters. During the entire runoff period, FOX 5 was the number one station in Atlanta for 6.5-hour morning news block. Hard work begets just awards. And so, it’s no surprise we led the market in political revenues generated. This success was replicated across the FOX Television Stations footprint. Net political revenue approximated $190 million in the quarter, bringing our total for the stations in the first half of the fiscal year to approximately $260 million, an amount more than three times greater than the last presidential cycle. The news cycle also continued to connect engaged audiences to the various FOX News Media platforms

Joe Dorrego:

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

Ben Swinburne:

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

Joe Dorrego:

Operator, we could go to the next question.

Jessica Reif Ehrlich:

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

Jessica Reif Ehrlich:

One question on sports betting.

Jessica Reif Ehrlich:

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

Joe Dorrego:

Operator, we can go to the next question.

Doug Mitchelson:

Thanks so much. So, question for Lachlan, but I guess partly a jump ball. I’m just curious, future profitability potential for Tubi. So that’s the one question. The details are, you talked about the usage up 100% and advertising up 70%. So, a view time of 70%, revenue up more than 100%. So, CPMs are obviously expanded. I’m just curious what the level of ad pricing is now relative to, say, broadcast primetime and where you see upside there? And you talked about Tubi being the leading AVOD platform in the future, and I’m just curious, your view on competitive differentiation. I think a lot of content that ends up on these AVOD services is not exclusive. And so, what do you think will attract people to Tubi versus other AVOD platforms that are out there? And then lastly, just the margin structure when you hit that $1 billion plus of ad revenue for Tubi would be super interesting. Thank you.

Steve Tomsic:

Yes. So, Doug, just in terms of the other question, in terms of margin development as we get to that $1 billion, we aren’t going to put a target out there obviously. But I think the way you should think about it is, in the near-term, if you look back over the last six months, Tubi has actually been P&L neutral for us, up from a bottom line perspective. We would expect that to change over the course of the second half as we continue to invest in the growth. And then over time as we take our foot off the gas in terms of investing in growth, you’d see some pretty good conversion of revenue into bottom line margin as this business gets to scale, so. And when you look at that revenue development in the near-term, Lachlan is absolutely right in terms of where CPMs are. The way where we see a lot of headroom, where we’ve gotten a lot of growth from in the initial phase has just been fill rate. And so, there’s still plenty of headroom to take that further north.

Operator:

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

Lachlan Murdoch:

Sure. Thanks, Robert, for the question. So, first of all, we see NBC Sports, the announcement of it shutting down as probably a net positive for FOX Sports 1. There is less competition, I suppose, although we never saw them as our main competition. This year, FOX Sports 1 beat both ESPN2 and NBCSN for an entire year for the first time ever. So, we feel very well positioned. Obviously, with COVID and with some sports being less available, opinion programming, which is probably very reliable and you don’t have the higher rights costs accounted for 35% of the FOX Sports 1 schedule and over 20% of viewing, which I think is important statistic. It shows that you can be compelling and you can win with a mix of both live sports, but also with the sports analysis and opinion that Fox Sports 1 has. Clearly, having a breadth of sports platforms will ultimately help FOX Bet and our partnership also with FanDuel. I’d also include in that obviously the local stations and the amount of time and effort the local stations and their news and their sports broadcasting also contribute to promoting FOX Bet and engaging also with our partners at FanDuel. The last part there in terms of about sort of sports rights, I think that the thing that Fox has always had as part of its DNA is really a focus on the major sports rights as well. So, it’s obviously Major League Baseball, the NFL, WWE. And so, our focus on our bouquet of sports is really the big sports that are going to move the needle and not so much in smaller – still great sports but smaller sports for other platforms.

Operator:

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

Lachlan Murdoch:

Sure. So, first on the ad market, and in this last quarter, we’re talking about, obviously, the impact of political as we’ve discussed, Alexia, has just been tremendous. I’d be tempted to say we’ll never see a political season so big, but I don’t think that’s true. I think when you have a Senate and the House so finely balanced, I think we’re going to see these records broken in two years and four years for sure. So, the spending was pretty staggering. Obviously, we have the additional bonus of sorts with the Atlanta station and the Georgia runoff, which I think contributed to. I’m not sure it was just a runoff, but the Atlanta station alone contributed about $60 million of political revenue in itself. So, in the past quarter, obviously the story, the headline is all political. I think in the current quarter, obviously we have difficult comps because of the Super Bowl, and obviously having had the Super Bowl last year, which by the way rated almost 102 million viewers. It was a terrific Super Bowl and a great achievement. That obviously, we can take that comp out. So, if we strip out the Super Bowl revenue, we’re pacing in the negative single – mid single-digits, maybe even a little bit better than that. So mid single-digits down 5%, 6% as where we would expect to end up in local advertising for the quarter. That’s a tremendous improvement if we look to COVID from a year ago, right. Every quarter, every month, we have seen advertisers come back. And now we are stripping out football and stripping out political and everything else. We’re about back to where we’d expect to be year-on-year. Of course, looking forward, the comps become much better because we will have been – we’ll be comparing to the first quarter that was CVOID impacted versus now being in a more normalized advertising environment. From a category’s point of view, I think I mentioned too in response to Jessica’s question, entertainment leads the categories; home, professional services, all strong. I should just mention that on the flip side, that automotive, which is obviously a very large category for us, is still down. But this is primarily driven, skewed upon by our domestic manufacturers. In fact, foreign auto spending is roughly flat. By the way, second part of your question…

Joe Dorrego:

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

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation First Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer and the Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good morning and thank you all for joining us to discuss our first quarter results. Today is a big day for Fox, and not just because we get to brag about our strong financial performance, continued operating momentum, and burgeoning digital assets, such as FOX Bet and Tubi, but because every four years we have the privilege and the responsibility of reporting on a U.S. presidential election. This very moment, as we speak, our viewers are starting their election day turning on their TV sets to where they left them last night, the FOX News channel, or opening their web browsers to FOXNews.com, or checking the FOXNews app for the latest report. Throughout the day, tens of millions of Americans around the country will turn to FOX to follow our coverage of the presidential election as well as senate, state, and local races. They do this because they trust us, and our legion of hardworking and diligent news professionals. Hours ago, our studios across the country were lit for today's coverage, and anchors, producers, camera operators, engineers, news editors, reporters, and more all got ready for a long day and night ahead, but are real preparation for today began years ago. In fact, it is over 12 months since we launched our Democracy 2020 campaign. This intentional, careful planning has served us well. The energy and excitement are palpable in the newsrooms of our local Fox television stations and at FOX News, where Bret Baier and Martha MacCallum will be live from Studio F in just a few hours. The news teams at the Fox television stations and FOX News have done a superb job throughout this election season, and viewers from across the political spectrum have been turning to us in record numbers as a result. FOX News finished September as the first cable network to lead all broadcast networks in weekday con with total viewers for the full quarter. In fact, FOX News has been the most watched network in all of television, from Memorial Day through Election Day. We achieved ratings growth in total day and primetime throughout the first quarter. FOX News total day ratings were up 28% in total viewers, and 31% among adults 25 to 54 years old. Primetime ratings increased even more substantially, up 43% in total viewers, and up 54% among adults 25 to 54 years old. This demo is sought out by advertisers, making these gains particularly impactful. Already in the second quarter, the rate of growth in both total viewers and in the 25 to 54 demo has accelerated from last quarter. Just one recent example, last Tuesday, October 27, Tucker Carlson Tonight, on the FOX News channel had more total viewers than the season premier of NBC's This Is Us, that same night, and while our linear platform is remarkably strong, our audience is also increasingly accessing our digital products to connect with us. FOX News Digital ended their first quarter with record engagement. More than 11.5 billion total video views. Total minutes watched clocked in at 14.2 billion, and unique visitors jumps to 115 million per month. FOX News not only draws large audiences nationally, it also draws a more politically diverse audience in more strategically important states than any other cable news network. According to Nielsen, FOX News dominates share of viewing in swing states and key blue states. FOX News accounts for 50% of total primetime viewership in swing states, compared to MSNBC with 28%, and CNN with 23%. This is only possible because we speak to the broadest audience of anyone in our competitive set. Our audience includes the greatest number of registered independent and likely voters of any cable news network. FOX News is relied on by 38% of registered independents. This speaks directly to the quality of our journalism and the balance of our reporting. People have noticed this year both presidential candidates and the pack supporting them have turned to FOX News to reach our large, engaged, and diverse audience. In fact, 28 different political candidates or groups advertised on FOX News during the month of October. Additionally, we have shattered the record for political advertising at our local stations, surpassing the previous high set during the 2018 midterms. The geographical mix of our stations includes both the largest DMAs, and locations that are longstanding and newly emerging swing states. This allows us to capture a significant share of local political ad spend. Since I spoke to you in August, we've gained increased visibility into local advertising pacing. Last quarter, our local stations were experiencing a year-over-year decrease in our base ad market of approximately 40%. Compare that to this first quarter, where our core stations were down approximately 20%. Including the benefit of political and station acquisitions, we are now pacing ahead of the same time last year. Looking at it slightly differently, at the beginning of COVID our stations were pacing down nearly 50% compared to the prior year. Today, they are pacing ahead. This is a tremendous return to strength in a remarkably short period of time. All of our stations also play an important role in connecting audiences in key sports markets with football, baseball, and other FOX Sports programming. We have stations in nearly all NFC markets, including our recent additions in Seattle and Milwaukee. While overall NFL viewership has seen year-to-year declines across all of its partners, Fox's America's Game of the Week is well on its way to a 12th consecutive season as TV's most watched show. America's Game of the Week is averaging over 24 million viewers, up slightly over last year. We used this, our 27th season of NFL on Fox to accelerate awareness and use of the free-to-play FOX Bet Super 6 app. By week five of the NFL, we signed up more than 1.3 million new users, meaningfully surpassing our estimates and increasing total installed users to over 2.9 million. More than 1.2 million people played in our November 1st NFL Super 6 game. By promoting the FOX Bet Super 6 app across our entire portfolio, we have greatly expanded its user base. Expect more sports and non-sports games and promotions across our platforms given the results we are seeing. One week ago Sunday, the Super 6 app was number six in the entire iOS App Store, only behind apps like Facebook and Snapchat, and Super 6 is consistently at or above the top of the sports category in iOS and/or downloads. Drafting after success of Super 6, FOX Bet, our sports betting app is also energizing users. The app which is currently available in Colorado, New Jersey, and Pennsylvania has been the third most downloaded sportsbook app for the past two consecutive weeks. That will only increase as we launch in new states. We anticipate our next launch will be in Michigan early next year. All of our Fox businesses are committed to our partnership with Flutter, and propelling this growth of the Super 6 and FOX Bet platforms. Each week, we are driving over 100 million media impressions across our portfolio of owned-and-operated Fox assets. Another important digital expansion for the company, our ad-supported streaming platform Tubi is thriving. Let me start with the astronomical growth we've seen this quarter. In August, Tubi reported 33 million monthly active users, representing a 65% year-over-year jump. More importantly, since acquisition, Tubi has average approximately 100% increase year-over-year in Total View Time, the most meaningful method when measuring the performance of any AVOD service. This is due in part to more than 41 Fox titles currently available on Tubi including The Masked Singer, Gordon Ramsay's 24 Hours to Hell and Back and LEGO Masters. When Tubi began streaming The Masked Singer, the show quickly became Tubi's number one television series overall. We use the show to increase viewers to Tubi, and we are also driving them to the platform through marketing across our networks, including the FOX Network and FOX News. Most recently, Tubi sponsored the post-game show during the Major League playoffs, and the World Series on Fox. Using these internal Fox marketing opportunities will increase consumer awareness of Tubi which will drive exploration and viewing. We are also using our television stations to promote and differentiate Tubi. As part of Tubi's News on Tubi launch on Roku and Amazon Fire in October, viewers now have access to live feeds from 18 Fox owned-and-operated stations in top markets, including New York, Los Angeles, Chicago, and Dallas. The News on Tubi offering also includes content from third parties, including Bloomberg TV, and NBC News NOW. News on Tubi serves several important objectives. It provides viewers with the best and local news, and further leverages the access of Fox, also expanding consumers' understanding of what Tubi offers. With News on Tubi, the platform is for the first time providing live viewing opportunities, and we are now monetizing this new content, and our impressive viewership gains. We are including Tubi in all of our ad sales discussions. The power of the Fox and Tubi partnership is evident. Since September 1, Tubi has achieved 45 of the top 50 revenue days in its history. With a median age of 34, Tubi's audience is young, diverse and in demand for many brands. The leading Fox entertainment programs that feed Tubi are in important synergy that we will continue to capitalize on with new and returning shows. All FOX Entertainment's returning shows including the 9-1-1 franchise, Prodigal Son, The Resident, and Last Man Standing, are back in production with scheduled return dates in early January. As in previous years, Fox will launch robust and strong slate of shows mid season utilizing the end of the NFL season and NFC championship as a springboard. Despite pandemic related production halts in the summer that impacted its fall lineup, FOX Entertainment had a successful premier week this television season. For premier week which is the week of September 21, Fox was the number one network for entertainment program. Fox also kicked off the 2020–2021 fall television season with a number one new series, the number one comedy, and the number one drama, and Fox has continued that leadership position, ranking as the number one network for the week of October 19. Each of our core brands is a powerhouse distinctly positioned to differentiate itself from competitors and appeal to viewers. The power of our total portfolio though is even greater than some of its parts. Look at the share of voice recently achieved by the FOX Network and the FOX News channel on Thursday, October 29. Together these networks made up 65% of TV total viewer share compared to the rest of broadcast. The reliable content strength of FOX News in combination with NFL on Fox captured nearly two-thirds of all viewers watching broadcast television that evening. On several October evenings, our leadership brands accounted for at least half of all viewers watching broadcast television, and that occurs with sports on the network and also when we air one of our entertainment hits. The power of our brand is not only recognized by our audiences and advertisers, it is also valued by our distribution partners. In the first quarter, we saw affiliate revenues grow by 10% driven by healthy rate increases. While we did continue to see decline subscriber volume, that trend is improving. This past quarter, we saw industry subscribers decline around 6% which is an approximately 50 basis point improvement from what we experienced last quarter, and our recent agreements coupled with updates we heard during the recent earnings calls in October from AT&T, Comcast, and Charter give us an encouraging look into the December quarter. Our networks and content continue to be essential to the services offered by traditional and virtual MVPDs. We are sustaining our momentum and building on our strengths. With increased visibility to the market and resumption of sports and entertainment production, we are optimistic about and excited for the remainder of the fiscal year. And now, Steve will take us through the details of the quarter.

Joe Dorrego:

Thank you, Steve, and now, we'd be happy to take a few questions from the investment community.

Doug Mitchelson:

Thanks so much. Lachlan, I think maybe the obvious question is, I know you like to have some walking-around money. With $5 billion of cash on the balance sheet are you seeing a lot of interesting activity in the M&A market, when you think about the increased visibility that you just talked about on this call, relative to what we had three months ago or six months. Does that change your focus in terms of your appetite for buying back stock? How are you thinking about deploying that capital over time? And if you don't mind, one quick follow-up, are you willing to give us what the total viewing time is for Tubi? I know you noted that it was up 100%. Thanks so much.

Joe Dorrego:

We can go to the next question.

Alexia Quadrani:

Thank you very much. You've made -- you really hit some impressive milestones at Tubi, and I think a lot more new content. I'm curious when we may get maybe some more information or a bigger update on your long-term DTC strategy, and then just a quick follow-up, any color you can share on the NFL negotiations and how important maybe Thursday Night versus Sunday Afternoon is to you?

Joe Dorrego:

We can go to the next question.

Michael Morris:

Hi, thank you. Good morning. One question on expenses, can you share what expense growth would have looked like excluding the programming disruptions that we've experienced. I think your operating expense, looks like it's down about 14% in the quarter, and Steve, you referenced sort of an unwind of that going forward. So I'm curious how much of that does unwind, and whether this disruption has impacted how you think strategically about that mix of investment in scripted programming versus sports and news? And then one other, just real quick, if I could, I'm curious of you can share any thoughts on how the outcome of today's presidential election may impact FOX News going forward? Do you think ratings can vary based on an outcome? And also, the president has in the past referenced perhaps starting a news network, and how you would think about that competitively.

Steve Tomsic:

Let me, Michael, just in terms of expenses, listen, the impact of COVID is getting harder and harder to split out because you just don't know where the advertising would have -- it can affect you on the advertising, but if I just look at expenses and really just try and isolate for things that have been scheduled out of Q1 into Q2, Q3, Q4, I'd say that we benefited from about $270 million -- $280 million of expenses in Q1 that will shift into the back-half or the back three quarters of the year. You'll have a reasonable concentration of that hit Q2 because it's when you'll have a heavy concentration of both NFL and college football, and then we'll see the entertainment hit, largely, Q3 and to Q4.

Joe Dorrego:

We can go to the next question.

Michael Nathanson:

Yes, thanks. I have one for Lachlan and one for Steve. Lachlan, on sports gambling, I believe you have an option to buy 18.5% of FanDuel next year, in '21. I wonder how do you think about that, and just given how the market is valuing sports gambling how are you thinking about putting excess capital into that business? And then for Steve, we always ask you about affiliate fees when people are disappointed. This quarter, you're surprisingly upside; you've given us the update on subscriber trends. Is anything else coming on, a little bit of new pricing; perhaps some new deals came through? So any more color on the acceleration in affiliate fees would be helpful. Thanks.

Steve Tomsic:

Hi, Michael, it's Steve. In terms of the affiliate, if I look at it sequentially the biggest driver was just the subs were a little bit better versus Q4. So, Q4 as Lachlan mentioned versus Q1 this year with 50 basis points to the better. There's a couple of small things in it, we are lapping -- last quarter where we were out there with these personal period of time. This quarter, we had no Keep Americans Connected sort of accrual in the numbers. It's more underlined than it is any particular one-offs.

Operator:

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

Lachlan Murdoch:

Sure. So, first on Fox Bet, I think I know wagering has exploded during COVID and stay-at-home. People who -- and particularly as -- well, while sports was in a hiatus, gaming was growing strongly, and as sports came back, sports wagering grew tremendously. So, if you look at the trajectory of where that industry is going and particularly as states incrementally or consecutively open up to wagering, this business remains a larger, and larger opportunity for us. However, Jessica, as you'll remember, the structure of our partnership with Flutter is that they control the FOX Bet business today, and they fund the FOX Bet business today as Fox Corporation is not a licensed entity. Having said that, we work with them incredibly closely in terms of the promotion of FOX Bet in order to grow the value within that joint venture. The second part of your question on Tubi, we are now -- and we have now for several months selling Tubi -- and I should have actually also spoken to this with Alexia's question, we are selling Tubi in every single one of our conversations with our advertising partners. Tubi increases Fox's reach by over 20% and it's a young and diverse audience which is unduplicated, or largely unduplicated part of the Fox audience. So, every time I talk to Farhad, which is very regularly, there's a new daily revenue record that he hits, which is tremendous to see, and look, to be honest, we're only at the beginning. So, when we think of both the key metrics of time spent viewing, total users, and as importantly or maybe most importantly, revenue, Tubi consistently and continually is exceeding every expectation in our acquisition case.

Operator:

Okay. That question comes from the line of Ben Swinburne from Morgan Stanley. Please go ahead.

Steve Tomsic:

Hey Ben, I'll take the political advertisement. It's been a month to quarter and a month to half quarter. The good thing about this cycle is it's not just been a local story; we've been looking significant amount of national political revenue. So, for the quarter, we did a shade under 100 million across the group of which 70% of that was local, and then, when we look at it across the first-half, so July 1 through to today, we have plenty of skills under the next earnings call, we'll push close to $300 million of ad revenue, political ad revenue for the full six months, of which about just north of 200 will be local. So, it's been an enormous quarter-and-a-half for us.

Joe Dorrego:

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

Operator:

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation, and for using AT&T teleconference. You may now disconnect.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions]. I'll now turn the conference over to Chief Investor Relations Officer and Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and thanks, everyone, for joining us today to discuss our fourth quarter results and to reflect on our first full fiscal year as new Fox. I know a lot of you on the phone have had a long day and have just come from another earnings call, so we will try to keep this as tight and as brief as possible. I doubt any of us consider 2020 a great calendar year. It's been extraordinarily difficult on our businesses, on our health and on our families. I'm sure it's a year we would all like to be through and done with, and we will be soon. But looking back on Fox's 2020 fiscal year is another story. Our fiscal year has been extraordinary, not because of COVID-19, but in spite of it, our 2020 fiscal year has shown off the strength of Fox, the logic of our strategy and the resilience of our business model and of our teams. To that last point, I would like to acknowledge the outstanding work and dedication of my Fox colleagues across the country. They too are extraordinary. Without them, there would be no sport, no news and no entertainment on our platforms and stations. What together we achieved last year was remarkable. I'd like to first give FOX Sports a shout out for an incredible year, which saw the brilliant broadcast of both the historic 7-game World Series and an exciting Super Bowl LIV, watched by over 100 million people. Of course, not long after the Super Bowl in Miami, sport was shut down. But the team at FOX Sports never stopped working to bring NASCAR, baseball and eventually football back into America's living rooms. On our last earnings call, I said, like the rest of America, we can't wait for the first pitch thrown, the first ball hike and the sound of engines starting again. Thankfully, the wait was not long. Our FOX Sports production team lost no time preparing to produce America's biggest events in ways we didn't think possible just a few months before. The sports team has invented new technologies to not only produce, but enhance the games being played today. NASCAR was the first major American sport to return from its pandemic hiatus, and America's pent-up demand for sports was palpable. Working closely with NASCAR, FOX Sports designed a production that involved minimum crews, minimum travel and maximum health protocols to ensure a safe and enduring race season. We brought NASCAR back using only 1/3 of the people we would normally have trackside. Our director and camera operators and audio were on site, while graphics, replays, producers and talent were spread out between Charlotte and Los Angeles. With very few or no fans on the track, it allowed us to break new ground with miniature drones flying overhead to get never before seen aerial footage. As the season progressed, even our in-car audio production and feature editing were produced live in technicians' homes. We then turned our attention to baseball, when, on July 23, the Fox baseball season opened, with a triple header highlighted by 2.8 million viewers for the Yankees/Nationals game. The opening was up almost 20% over Fox's prime time Major League Baseball average last year and was sold out due to heavy advertising demand. We produced four baseball games on our first weekend, and none of the 7 talent were in the same place as we connected 10 different facilities in real time with our producers and directors in Los Angeles. In addition to our enhanced crowd audio, we have now introduced computer-generated virtual fans to the stadium. This innovation was created by mixing our first down line technology and real-time theatrical visual effects. And now we can't wait until the start of football. We love sports for the adrenaline, it provides us, for the passion it inspires in us and for the narrative and drama of watching the classic underdog win from behind. Team U.S.A., beating the Soviet ice hockey team at the 1980 Winter Olympics or Buster Douglas knocking out Tyson or the FOX Entertainment network finishing the broadcast season in first place from fourth the year prior. The network staged a dramatic comeback this past year and leapfrogged our competitors to regain the number one broadcast network title for the first time in 8 years. Fox was the only network to deliver year-over-year ratings gains among adults 18 to 49 and total viewers. We outperformed the number two network by 31% in the demo, driven by The Masked Singer, LEGO Masters and 9-1-1

Joseph Dorrego:

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

Benjamin Swinburne:

I will limit myself to one question. I was wondering if you guys could talk a little bit more about sports betting? You've obviously talked about The Stars Group investment, and we followed that, and that's been a very successful one. But this appears to be a market that's really booming in the states, even with COVID, and the prospects are quite optimistic. So I'm just wondering how you think about taking advantage of that opportunity even more than you already have? Are there things you're doing strategically with your partners or even on the FOX Network to sort of really lean in to sports betting to make it a bigger part of the business and a part of the story?

Operator:

We have a question from Jessica Reif Ehrlich with Bank of America.

Lachlan Murdoch:

Thanks, Jessica. I know there's been a lot of talk about the upfront and some discussion about it on other calls. I think the thing -- well, the first thing I'd like to say is that the sales is very active at the moment, but it's a different sort of upfront this year for everyone, right, than in past years. I would call it sort of a rolling upfront. It's not a process that has a beginning, a middle and an end. We are working, as I think I said in the last call, with all of the agency groups and each of our clients as they reengage with their -- with consumers and customers across our platforms. And so some have been much more heavily impacted by COVID-19 than others. Obviously, the categories that are affected, retail, theatrical entertainment, fast food restaurants. Obviously, travel are all highly impacted by COVID-19. So each of those clients, we're engaged with and sort of negotiating with as we go forward. I think what you'll see is as we close -- and as we have closed upfront negotiations, you'll see that going right up until really through to the beginning of the football season. And we are incredibly heartened by the strength of scatter in the market. I think scatter, across the board, is in the mid- to high teens. I think that shows the demand for marketers to get back on air in a mass market and broad way. We are selling it across all of our platforms, news, sports, entertainment and Tubi. Tubi is now integrated in most, if not all, of our upfront conversations. When we add Tubi to a sale, it increases reach by over 20% for the client and also obviously makes the demographic younger and more diverse. And Jessica, to your question on FOX News, FOX News ratings have been astronomical. We are monetizing them very well. One of the benefits of COVID-19 has been with a larger news audience. The audience has also gotten younger, and that's brought actually new advertisers that hadn't advertised on FOX News, new advertisers on to the platform. So it's a very strong positive story for FOX News.

Michael Nathanson:

I have two quick ones, I promise. So first question is this, what is your thinking about -- I have a terrible echo, one second. What's your thinking about Thursday Night Football returning again, given how much profits you guys made at the FOX TV business before Thursday Night? And how less are Thursday to your P&L? Second, Steve did a very good job in laying out the valuation case for your stock, and as it -- was really cheap on cash flow, asset value and any way you look at it.

Steven Tomsic:

Yes. And Michael, I'll try and answer the question I think you're asking. I think there is an element of frustration in sort of the value attributed to the company. I think the way we sort of look at it, you've got this traditional business that is in a strong, competitive and strategic position, highly profitable, throws off a lot of cash. We don't get the sort of benefit from the cash flow generating aspects of the business, and then we've bought into various other investments, which I highlighted in my opening remarks, where it feels as though we're not even getting acquisition value for those businesses. So the extent to which we can shine torches on both aspects of the business is helpful, we think, to sort of getting the share price to a more appropriate place.

Alexia Quadrani:

My question is really on football, college and NFL. I totally understand you guys don't want to speculate whether it will come back or not. But speaking more broadly about your relationship with your distributors, I guess what sort of alternatives or sort of leeways do you have if these -- some or part of these sports are outright canceled and they don't return sort of later on in the year? I'm just curious about, is there any danger of breaching the sort of the affiliate contracts there?

Operator:

We have a question from John Janedis with Wolfe Research.

Lachlan Murdoch:

So we're seeing strong demand. You've got to break it down, I suppose, for us, by vertical. There's a -- the news ratings are so far above last year's. And as I mentioned, we have new clients and new categories of clients on FOX News. So news demand is really driven by the audience and by the ratings there, so we're seeing tremendous demand in news. Obviously, it's going to be a -- continue to be an incredibly strong news cycle, I think -- and certainly through to the end of the year. There's no let up there. And I think advertisers are flocking to the certainty of those ratings and that audience. I think sports, there's a great pent-up demand for sport. We saw that in the sellouts in Major League Baseball. We saw that when we brought back NASCAR, the advertiser interest in NASCAR, and we expect to see it with football going forward as well. As we go through our upfront process, we have visibility in terms of what the clients are telling us that they expect to spend. And certainly, in news and sport, we're seeing healthy budgets there. I think entertainment is a different kettle of fish as people are waiting to see what happens in the fall season. As we explained earlier on the call, we have a relatively fresh scripted season with 2 shows that we had in the can that we hadn't aired. And we do hope to have The Masked Singer, not for mid-season, but for the fall, if possible. And that would be -- that will absolutely drive ratings and revenue there as well. When we look to the stations, the -- we're heartened to see how quickly local advertising is coming back, particularly in those smaller markets. So the bottom half of our -- I don't want to say bottom half, but the smaller half of our station group, where they have, perhaps, less sort of population density, less shutdowns due to COVID-19, and those markets are coming back well. And as I mentioned before, the markets that are really buoyed are the ones where this political revenue has started to pour in. And then the overlay of all of that is obviously scatter being very strong, which I think just goes anecdotally to the demand by advertisers and clients to get back and sort of mass marketing.

Operator:

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

Operator:

Ladies and gentlemen, thank you for your standing by. Welcome to Fox Corporation Third Quarter of 2020 Earnings Conference Call. At this time, all participation phone lines are in a listen-only mode. And later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer and Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and thanks, everyone, for joining us today. We are living through extraordinary times. Since we last all spoke together, who would have imagined our lives could have all been turned so upside down. The impact of COVID-19 has impacted our economy, our businesses, our colleagues and ourselves. We owe deep gratitude to the nurses, doctors, police, teachers, aged care workers, volunteers and countless other front-line workers for their incredible and brave sacrifices. At Fox, we thank every one of them. Their work humbles ours. We have spent these last few months protecting the health of our employees; providing essential news, information and entertainment to our communities; all while bolstering the strength of our company in order to best tackle the challenges ahead. At the outset, let me say that, if there is anything you take away from my remarks today, it should be that Fox is in a strong position to deal with the impact of this pandemic. Our strength was clearly demonstrated in the quarter, which was only partially impacted by the pandemic and is illustrative of the outstanding results Fox delivers in unaffected cycles. The strength of Fox has also been on display in the weeks since the end of the quarter as we navigate these unprecedented times to continue to provide our services to communities across the country. Starting with a review of our third quarter, you will have seen that we delivered exceptional financial results, achieving revenue and EBITDA growth of 25% and 20%, respectively, adjusted earnings per share growth of 22%, and generating over $1.5 billion of free cash flow. Our revenue growth was multipronged. It feels like a lifetime ago, but as a reminder, the quarter began with our record-breaking broadcast of Super Bowl 54, where we generated around $600 million of gross revenue across the company. But the strength in the quarter extended well beyond the Super Bowl. Local advertising at the FOX Television stations grew by over 20% as Super Bowl revenues were supplemented with over $35 million of gross political ad revenues in the quarter. At FOX News, advertising revenues grew by 15%, led by a 45% increase in digital ad revenues. And we had another strong affiliate quarter with total company affiliate revenues growing by 10%, despite a touch over 5% reduction in pay-TV subscribers. Steve will cover the details of our financial results shortly. Operationally, the quarter saw FOX News and FOX Business deliver their largest audiences in each network's history with FOX News ratings up approximately 40% year-on-year. The success of FOX News Media's brands extended beyond their linear properties, FOX News Digital achieved its highest quarter ever across all KPIs, including over 11 billion digital page views. Company-wide digital reach grew 42%, while digital engagement nearly doubled year-on-year. Elsewhere on screens, the quarter brought us another successful season of The Masked Singer and the number one new broadcast reality series, the family-friendly hit, Lego Masters, two shows that we hope will shape the Fox Network lineup for years to come. While still early days, our strategy to leverage the cross-promotional power of our platform to support shows we have an ownership interest in is showing encouraging results. Bless The Harts was the number one new comedy and adds another leg to our Sunday Animation Block, while Prodigal Son was the second highest-rated new scripted drama on television. Locally, the FOX television stations continued the expansion of their news coverage, adding an additional five hours per week across Atlanta and Los Angeles. The stations' unified programming strategy drove ratings growth in essentially every day part, including daytime and late news. Corporately, during the past quarter, we completed important transactions to support the ongoing growth and momentum of FOX. Among them were, the closing of our agreement with Nexstar, in which we expanded our local market footprint through the acquisition of key stations in Seattle and Milwaukee, and the transfer of our Charlotte stations to them; the early renewal of our distribution agreement with one of our largest partners, Comcast, and our full portfolio of channels; and the announcement and subsequent closing of our acquisition of Tubi, which immediately expands our direct to consumer capabilities and provides our advertisers with even more opportunities to reach audiences at great scale. Coupled with combined power of Fox's existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct to consumer market. As an example of the scale, in April, Tubi generated total viewing time of over 200 million hours, which is up more than 150% versus prior year. This was also the first full quarter reflecting the results of Credible, our digital loan marketplace business. And while we are only just at the beginning of exploring the marketing synergies between Fox and Credible, the business has had a great quarter, doubling its closed loan volume and revenue year-on-year. Overall, the financial and operating results through the first nine months of the year confirms just how sturdy our business is and demonstrates the power and importance of our live sports, news and event programming to our partners and our audiences. Of course, our achievements have been rightly overshadowed by the outbreak of the COVID-19 pandemic, and by the challenges it has presented to all of the company's stakeholders, including our colleagues, the communities we serve, our business partners and our shareholders. We understand our responsibility to each stakeholder and are mindful of them in the balanced actions we are taking to address the crisis. As I mentioned earlier, our main priority remains the health, safety and well-being of our more than 8,000 colleagues. We continue to follow federal, state and local guidelines when it comes to our workforce in our locations across the U.S. Those whose job functions allow it have been working remotely since mid-March. And we have over 70% of our employees offsite at the moment. We are grateful to those essential employees, whose jobs remain -- require them to work onsite for their commitment and for their resolve. We have taken actions to protect and ensure the well-being of these employees, particularly for those that are out in the community informing the country of every aspect of the pandemic at a national and local level. While taking steps to keep our colleagues safe, we also continue to provide our viewers with the information they seek to better understand this pandemic on a national and local basis. In this spirit, we swiftly launched coronavirusnow.com, a free to use website featuring the latest news about the pandemic. Drawing on our news gathering and digital capabilities across the country, bolstered by third party content from government and health organizations, such as the Center for Disease Control, we've created the site to provide our employees, viewers and communities with reliable up to date information about this public health issue. Over 1.3 million Americans have accessed these specific resources. It's a wonderful example of the breadth of Fox coming together to provide a public service to our audiences at a critical time and in a new and distinctive way. Further, working with our distribution partners to ensure that all Americans could receive the latest national and local news regarding coronavirus, we offered free access to the FOX News channel and FOX Television stations, starting in mid-March and continuing for over a month. We are doing impactful work across our platforms to inform our viewers and to give back to our audiences. Fox raised over $13 million for Feeding America and the First Responders Children's Foundation, through our broadcast of Fox Presents the iHeart Living Room Concert for America, which paid tribute to the brave medical professionals and local heroes who are working on so many aspects of the pandemic. In early April, Fox News and Facebook co-hosted a coronavirus town hall, featuring medical and business experts, including members of the White House Coronavirus Task Force. Fox News and Facebook jointly donated $1 million to Feeding America's COVID-19 Response fund. In partnership with NASCAR and with the NFL, FOX Sports donated to Feed The Children, the American Red Cross and Feeding America. FOX Sports and FOX News talent have taped special service -- public service announcements, encouraging viewers to stay home and to seek the latest guidance from the CDC. To date, we have broadcast nearly 30,000 COVID-19 PSAs. Our FOX Television stations have spearheaded charitable initiatives to assist their local communities from benefiting food banks and presenting on-air school lessons for students with limited access to technology. And an initiative I am particularly proud of is the preparation and delivery of 2,000 meals a day for the disabled community in Los Angeles by our Fox Studios foodservice staff. This gives us the dual benefit of keeping our amazing staff in work, while providing much needed support to the people of LA. We'll continue with many of these and other initiatives where we can be helpful. And I've asked each of our 8,000-plus employees to look for ways they can contribute to their community while working from home. At the same time, we're keeping a close eye on the evolving impact of the crisis on our business, adjusting the way we operate in the near-term, communicating with our partners and evaluating our longer-term models to ensure that we maintain the strength of Fox for the future. Clearly, we are not immune to the impact of COVID-19, and we acknowledge the continuing pandemic will influence our future financial results. The uncertain nature of the situation, however, makes it challenging for us to estimate the future performance of our business, particularly over the near to medium-term. So what has been the impact on our business to-date? At a macro level, sports events have been deferred and the production of certain entertainment content slated for the fall has been suspended. However, our activities around news have grown and intensified. Our local and national news ratings have been strong with FOX News ending the third quarter with its largest audience in history. We have seen this momentum accelerate into the current quarter with audience levels rising further, most notably in the younger student demos. This quarter so far has seen the network's adults 25 to 54 audience nearly double from prior year levels. This growth has not gone unnoticed by advertisers with new business coming to FOX News from clients looking to reach these younger demos or to transition dormant sports dollars to news or to present different marketing messages in light of the virus, thereby, mitigating most of the pullback in the categories that you would expect, such as auto, entertainment and retail. Categories that have moved spending into FOX News to reach our expanded and engaged audiences include insurance, fast-service restaurants, telecom, streaming and tech. Where the impact of the pandemic is most apparent in our business is at our local stations across the country, where despite viewership gains for our local news programming, fiscal fourth quarter advertising revenues are pacing down around 50% from year ago levels. The local auto, local retail, local travel, and local entertainment categories are leading this decline for us and the rest of the TV market -- local TV market. We'll only see the pattern of how these categories will return after states and municipalities open back up for business. On our last earnings call, I indicated that all signs pointed to a robust political ad cycle for our local markets. As a result of the contraction of the field of presidential candidates and the postponement of many state primaries due to the pandemic, we have seen a slowdown in the active political advertising spend that we saw in the third quarter. However, traditionally, the political campaign significantly ramped up spending in our first fiscal quarter, and we expect, with election day still six months away, that this category will intensify again as we approach November. Turning to sports, which accounts for over 40% of our total annual advertising revenue. Very little of this revenue has been affected so far by the shutdowns. Our sports revenue is concentrated in the fall when baseball's postseason and the college and NFL football seasons are most active. We're in close contact with all of our sports partners and know that they are being thoughtful around their scheduling decisions by prioritizing the health and safety of all of the personnel associated with their sport, their fans and their production partners like us. We'll look to them for their conclusions around when they will commence play. Whenever they are ready to start, we'll be ready to produce and to broadcast. Like the rest of America, we can't wait for the first pitch thrown, the first ball hiked and the roar of engines starting again. On the entertainment side, COVID-19 has caused the temporary cessation of nearly all program production in the industry. Regardless, Fox will enter the next broadcast year with a great deal of stability. This is partially because animation production has been less affected than live action, and we expect to return in the fall with all new seasons of The Simpsons, Bless The Harts, Bob's Burgers and Family Guy. Also slated for the fall, we have already completed new seasons of our Gordon Ramsey franchises, Hell's Kitchen, and MasterChef Junior, and have all new series finished and ready to go to air, including the psychological thriller, NeXt and the Southern gothic soap opera, Filthy Rich. At this time, should the conditions allow for it, we are planning for production in early August of Season 4 of The Masked Singer, which will target for a fall debut. We have also begun preparing new seasons of 9-1-1, 9-1-1

Joe Dorrego:

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

Jessica Reif Ehrlich:

Great. Thank you. So my multipart, one question. I've always said you're a super nimble company, very entrepreneurial. And out of all of this, maybe there's some opportunity. I'm just wondering if you're thinking about longer-term changes in your business where you can find more efficiencies? And then more immediately, what can you say in terms of sports? Well, I mean, WWE is still on. Can you talk about what the ratings have been and what the advertising has been? I'm just wondering sports without fans, does it change the demand in advertising? NFL is supposed to announce their schedule tomorrow. Do you think that will impact the advertising demand? Thank you.

Joe Dorrego:

Operator, we can go to the next question.

Ben Swinburne:

Thank you. Good afternoon. It's -- I think it was a year ago you had your Investor Day, which feels like 10 years ago at this point. But I wanted to ask you about a couple of things that you guys focused on then. One was the outlook for retransmission revenues, which is obviously a key driver of growth for the business. And I was curious, just given how much the ecosystem has evolved since then, if you continue to be confident you can deliver on those expectations, realizing that the world has changed quite a bit. And then secondly, I can't remember, John, how you phrased it, but something to the effect of, we're going to be cautious with buybacks and conservative with our balance sheet, sort of, for a rainy day or for a change in the cycle and be opportunistic. And we've certainly arrived at that point, I think you would agree. I'm just curious how you think about using your balance sheet, which is a strategic advantage in times like this to continue to sort of reinvent the company as you look out over time.

John Nallen:

Thanks, Lachlan. And thanks, Ben. The -- no, you're right. We've always viewed and have particularly viewed, with the birth of Fox Corporation, our balance sheet to be a true strategic asset of the company. But the balance sheet really reflects -- the strength of the balance sheet reflects the strength of the operations of the company. And I think, fundamentally, that's what you have to look at first is how strong the businesses are. It does give us optionality as we look longer term. But I think all the comments Lachlan made and Steve made in the near-term, with the amount of uncertainty around, we're really just focused on the strength -- the operating strength of the business. As Steve said, we paused the buyback once the pandemic hit. And I think we're just going to be cautious here for a little while and know that we have this strategic asset to continue to build the company.

Operator:

Comes from the line of Michael Nathanson of MoffettNathanson. Please go ahead.

Lachlan Murdoch:

Thanks, Michael. So two good questions, and we could talk about them for hours. But on Tubi, Tubi gives us tremendous reach. And we've talked before about our direct-to-consumer strategy. We were very pleased with both our kind of authenticated strategy through FOX NOW. It's obviously an authenticated platform for our product but also with the strength and the growth in FOX Nation. I should say FOX Nation has had I think April was the second-strongest month for FOX Nation, and it continues, which is interesting as it gets bigger, to achieve an over-80% conversion rate from free trialists into paying subscribers. So, the consumers of FOX Nation are absolutely enjoying and paying for that product as it grows. So -- and we've talked before about Fox Bet and Credible as a part of our direct-to-consumer strategy. But as far as Tubi goes, we feel that we are not getting back into the entertainment production -- original production business through Tubi. We see our existing slate of brands as being very important to the growth of Tubi. What we can do both through the entertainment network and its content, you can see today. The number one television show on Tubi is The Marked Singer and is driving a lot of important viewership and advertising impressions. And what we can do with sports and news and our local stations in the future, we think, is very exciting. So, Tubi is a great business. It's grown 150% year-on-year in terms of video hours viewed, but we can make it an even greater business. And we're getting to know the team, and we like them a lot. We think they're going to do great things. So -- but it is important that it's our brands, and Tubi's distribution, I think, is going to really be very exciting. On the NFL, obviously, COVID-19, we haven't been able to sit down across the table with the NFL to discuss their future plans and the renewal of our deals. We have been in contact with the NFL every day about a whole range of other things. So we remain very close to them. There's nothing that we see in the marketplace today that makes us feel any differently about the value of our partnership with the NFL. They've been a tremendous partner of ours for over 25 years. And we've built our business as they've built theirs, and we look forward to that continuing for many years to come.

Alexia Quadrani:

Thank you, very much. I just want to follow up on your comments about the upfront market. I understand the process is very different this year, and there's a tremendous amount of flexibility. But do you believe there will be some upfront markets that will occur, meaning that advertisers will be willing to make commitments for the fall and for next year? And I guess when you look at Fox's portfolio, sports being such a big component of it, do you feel that they will remain on the sidelines until you do get better visibility on that front? I know you mentioned having the line of games coming out soon will be helpful, but is it enough to sort of get them to kind of make these commitments?

Joe Dorrego:

Operator, we can go to the next question.

Doug Mitchelson:

Thanks very much. I guess the first question is jump ball. Has this environment impacted making any new investments in entertainment programming? And how does the accounting work for the programs that you're bringing back? I believe you booked them on a cash basis last year when you made the investments. Now that they're returning for second seasons and they've been successful, does that have any implications for downstream revenues that you start to book or cash you start to receive? And the second question, Lachlan, I was going to ask, it seems like you have an idiosyncratic mix of acquisitions to-date, and what should we expect next in terms of M&A? And it's interesting because you strung three together as part of a direct-to-consumer strategy. So either way, whether it's an idiosyncratic mix or whether it's actually targeted to a specific strategy, any thoughts on what's next for M&A would be helpful. Thank you.

Steve Tomsic:

Yes. And Doug, just picking up on the accounting and just, we called out -- just going back to the Investor Day, again, we called out $200 million to $250 million of programming investments, and we're on pace to be in that range for the full year. So I think we'll spend close to sort of $170 million of that so far in the first three quarters of the year. So we're still on pace, and as Lachlan mentioned, continue to look at how we invest in that going forward. The accounting won't change for us in terms of the amort of entertainment programming, which we generally sort of go through on first run. So there'll be no changes on amortization.

Joe Dorrego:

Operator, we have time for one more question.

Joe Dorrego:

I think we go to the next question. Operator

Lachlan Murdoch:

So on the -- let me talk sort of broadly over local and national. I don't want to per plate too because they're obviously different. But clearly, when we talk about our projections for a 50% reduction in local advertising, that's a mix of all sorts of different categories, right? The categories that you would expect are being affected significantly worse by COVID-19, they're pacing below -- or say, worse than 50% below. So travel, entertainment, restaurants are all pacing worse than 50%. But that's ameliorated by many categories that are down significantly less than that. Professional services, insurance and some categories frankly that, are up like pharmaceutical. So, it's a real mix. Again, as we said before, we can't really say from a local perspective, how local markets are going to recover. It will be state by state as various states and municipalities lift their shelter-at-home orders. But we are beginning to see positive signs in the pacing going forward. Over the last two weeks -- now, I'm not talking including national, over the last couple weeks we have seen a severe lessening of requests for flexibility with advertising. I think people -- advertisers and marketers are starting to look forward into the first quarter of next fiscal year and are beginning to think about how they market and get their products and their brands in front of our consumers again. So, we're just -- its early days, but we're just beginning to see that positive shift. As to political advertising, despite the impact of COVID-19 in the last couple weeks of the third quarter, the third quarter still was a record political year for us -- sorry, quarter for us -- the third quarter for us. Fourth quarter always is a trough, as the advertising start -- political advertising starts to pick up again in the first fiscal quarter of the next fiscal year. So we expect that trend to continue. We expect the political advertising to ramp up in the first quarter of the next fiscal year. And we believe we are still on track for a record political season. The reason we say that is, if you look at our markets. Obviously, it's going to be a hard-fought election. We have nine of our 18 markets or about half our markets are battleground states, including Arizona, Florida, Pennsylvania, Wisconsin, to some extent also Georgia, Michigan and Minnesota. Ten of our markets have U.S. Senate races. I won't list them all. And two of our markets have gubernatorial races. Of course, the House has contests in every market. So we think, our markets are -- I wouldn't say fortuitously, but are certainly positioned well to capture, a lion's share of the political revenue really in the first quarter of the next fiscal year. Thank you.

Operator:

And ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I now turn the conference over to Chief Investor Relations Officer and Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead, sir.

Lachlan Murdoch:

Thanks Joe. Good afternoon and thanks everyone for joining us for our fiscal 2020 second quarter earnings call. We just reported an exceptional quarter which really underscores the strength of Fox and our unique position in the market. Nowhere with that strength and uniqueness on greater display than this past weekend culminating with our groundbreaking broadcast of Super Bowl LIV. Let me say at the outset, how pleased I am of the efforts of our entire company. Our people delivered a flawless broadcast of Sunday's game to more than 150 million unique viewers across the country virtually guaranteeing its place as the most watched live television event of 2020. We surrounded the Super Bowl with an immersive and innovative programming lineup from Miami across Fox Sports, Fox News, Fox Sports 1 and our local stations. And we use this enormous platform to launch Season 3 of the Masked Singer right after the game which became TV's highest rated reality telecast in eight years. On Sunday, Fox had the largest revenue day in TV history generating around $600 million of gross revenue and providing an unmatched platform for over 100 advertisers from the pregame through the Masked Singer. And we delivered extraordinary ratings for our advertising, distribution and NFL partners. And while there's a massive amount of planning and activity that goes with broadcasting the Super Bowl, it is not been at the expense of delivering other imperatives for our business. During the first six months of the fiscal year, we have already achieved a substantial number of key operating milestones in support of Fox's growth and momentum. Among them were attaining number 1 status for the Fox Network and broadcast and maintaining the number one position of Fox News in all of cable. Delivering a strong sports calendar to viewers and advertisers particularly across baseball and football. Launching the WWE, acquiring credible and activating FOX Bet. We announced the expansion of our local station footprint with the acquisition of two key local market stations. We completed a substantial number of major distribution deals in line with our expectations, including gaining carriage for Fox News and Fox Business on Sling. And we have delivered impressive financial results led by revenue growth. This quarter, we've really knocked it out of the park. Steve will provide further color around the financial results shortly. But our first half results illustrate the power and importance of our brands to our partners and audiences, validating our strategy to build Fox around live sports, live news and event programming. Overall, our top revenue - our top line revenue is trending nicely. Total affiliate revenue increased by nearly 6% in the first six months of the fiscal year. And our advertising markets, both national and local, are buoyant, as illustrated by the current scatter market where we see pricing well over 20% higher than upfront levels. The strength of the television advertising market for us is at a level that we have not seen for some time. Across all of Fox, we are seeing growing demand because we are delivering sizable audiences for brands. And our national networks categories that are leading this intensity include financial, insurance, the streamers, technology, and foreign auto. At the local level, most of these same categories are prominent except domestic autos are currently running ahead of foreign. On the national news side of our business, Fox News and Fox Business are seeing a significant advertising client expansion across both our linear and digital advertising business led by their financial and technology categories. The FOX News audience is increasingly sought after by more and more advertisers as they look to reach a large engaged audience particularly across Middle America. This advertising strength is based in large part from delivering on the promise made last May at our upfront that Fox would own the fall across the entire Fox network. Overall, the Fox network took the top rating spot for the fall broadcast season marking its first number one finish in the 18 to 49 demographic in 10 years. Additionally, Fox is the only network to achieve year-over-year gains in both total viewers and in the 18 to 49 demo. Fox also ranked as the number one entertainment network in the fall in all viewers for the first time in our history fueled by the success of the Masked Singer, 9-1-1 and the top new series Prodigal Son. We're focused on sustaining this momentum in the second half of the year with the addition of the Deputy and 9-1-1 Lone Star and non-scripted content like Gordon Ramsay's 24 Hours to Hell and Back, the third season of the Masked Singer and our newest show LEGO Masters which debuts tonight on Fox. I suggest watching with your whole family. It's truly great. On the sports side of our business, we continue to drive unparalleled audiences to our signature programming. So far this fiscal year FOX Sports has been home to the U.S. Women's National Soccer Team, a riveting seven game World Series, the inaugural broadcast presentation of WWE SmackDown and ambitious new college football strategy and the launch of our partnership with TSG and FOX Bet. And clearly, it was a great year for NFL football and Fox which culminated Sunday with the broadcast of Super Bowl 54. For the second year in a row, Fox was able to expand its audience for Thursday Night Football, college football Saturdays and NFL Sundays. In aggregate, total regular season football viewing on Fox, NFL, and college football combined was up 14% over 2018. It's worth noting that no other network was up more than half this level. While the momentum we've seen at the broadcast network has been strong, equally as impressive is the performance of Fox News. Fox News finished calendar 2019 as a top rated basic cable network across all cable networks for a fourth year in a row, beating its nearest competitors by over 40% and achieving its highest rated primetime in history. Given the well-documented headwinds facing the broader cable industry, Fox News's ability to grow its audience over last year is a testament to the enduring power of the brand. The current news cycle continues to drive passionate viewers to Fox News and it's hard to see that trend subsiding. All of these achievements point to a simple fact. Fox is the home to both a top rated broadcast network and the most viewed cable network and that is an exciting position to be in. Equally exciting is to be the home of the two events that command the attention of the entire country in the same year. We started calendar 2020 with the first event, the broadcast of Super Bowl 54 on Fox. We now set our focus on the second event, the news equivalent of the Super Bowl, the presidential election. Fox News has branded Democracy 2020 election coverage is already in full swing. If history is any guide, audience levels and engagement will build significantly as the cycle progresses through the upcoming primaries and caucuses, the conventions, and the presidential debates, all culminating in our election night coverage across Fox News Media on Tuesday, November 3. As we build towards November, the financial benefits are not limited to Fox News. We'll see a sizable ad revenue uplift at our local television stations. As reference, in calendar 2018, during the last midterm election, our stations collectively generated record gross political revenues in excess of $200 million, shattering the previous record set during that to 2012 Obama-Romney election by 40%. Although we are very early in the political season, we are already seeing signs of further increased political spending with a vast majority of the spend dedicated to the unmatched reach of television. We saw it on Sunday for spending in the Super Bowl on a national level and we're already been seeing it at our local stations which positions us to deliver a new record for political revenues in calendar 2020. Our confidence is further strengthened by the fact that we will soon be expanding our station footprint which already includes stations in Florida, Michigan, Minnesota, Pennsylvania, and Virginia into another perennial swing state, Wisconsin, with the previously announced acquisition of the Fox affiliate in Milwaukee. As you can tell I'm thrilled with the rapid progress that we have made and the recognition of the great value of our networks by our distribution partners. As indicated earlier, we have achieved our goals in all the distribution renewals we have completed which reflects the importance of our content to the market. But, of course, we recognized that the trends in the paid subscriber universe has an impact on our business. As you know we are dependent on our traditional and digital distribution partners and their business plans for our inclusion in their pay television retail offerings. Well I'm not going to predict where a normalized pay TV subscriber base ends up in the near- to medium-term, I know that this ecosystem will still be the large component of our revenues for some time. Nevertheless, we have begun allocating capital to expand our revenue base while reserving our subscriber fee relationships into direct-to-consumer initiatives which will grow in importance over time. FOX Nation, FOX Between, and Credible, our three recent examples of this but we continue to evaluate opportunities where Fox can bring unique value directly to consumers while sustaining existing business models. Nonetheless, there is solid growth and momentum at the company's existing digital businesses where total engagement increasing last quarter by over 40% versus the previous quarter. Fox News Digital had a record calendar 2019 beating cnn.com in both total views and minutes consumed. And for the first time, Fox News Digital averaged over 100 million unique comScore Monthly visitors. Fox Sports also had a record digital year in calendar 2019, grown both total video views across streaming and social platforms and total minutes consumed by over 20%. It was also our highest streamed regular season for the NFL on Fox with growth of 57% last - over last year and I’ll refer to the Super Bowl, one more time, the game was the most streamed ever, 11.7 million users streamed all or part of the Super Bowl and 70% of their consumption was on Fox-owned platforms. While we have remain focused on executing against our operational plans and hitting our financial targets, we have also demonstrated how we look to deploy our capital to an appropriate balance of organic investment, strategic M&A return of capital to our shareholders. On the organic investment side, the previously announced $200 million to $250 million EBITDA investment began to ramp up this past quarter with the broadcast of WWE SmackDown and our investments in greater originality and co-production rights at the Fox Network, along with investment in our digital initiatives led by Fox Nation and the refresh on Fox business. In terms of strategic M&A, in October, we deployed approximately $260 million for the previously mentioned acquisition of Credible Labs. In the short time we have owned Credible Labs, we have seen the signs of the excess - exceptional growth the business is capable of. For example, during calendar 2019, Credible more than doubled its cumulative registered user base and experienced record close loan volume both of which drove substantial top line revenue growth. We have also committed around $300 million to acquire the Nexstar television stations in Seattle and Milwaukee in exchange for our station - stations in Charlotte. We expect this deal to close in the next month or so. And our commitment to return capital to our shareholders remains an integral element of our capital allocation strategy. In addition to the just announced semiannual dividend, we have now finished the initial $500 million of share repurchases that we committed to when we announced the $2 billion authorization three months ago. As we have consistently noted, we remain committed to deploying capital in a disciplined manner to maximize shareholder value through this balanced approach. Now, I will turn the call over to Steve to provide more detail on our financial results.

Joe Dorrego:

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

Michael Nathanson:

I have a two for anyone who want to take it. So first one is when you guys separated this new company out, the assumption was you’d have more bargaining clout with distributors because you have less channels to defend. As Lachlan said you achieved your goals in these negotiations just happened. Could you give us a sense of what those goals were and maybe how the goals have changed given the change in terms of landscape or for chord cutting? And then secondly, I believe you still own 5% stake in Roku. Could you talk about how that asset fits in with your cap allocation scheme especially in light of what happened last week with the impacts you guys had with Roku. So thanks.

John Nallen:

Yes. So, Michael, thanks. I would say the first six months of the year was unprecedented for us with the amount of renewals that we had all of which were successful against our internal plans. And you're right when we said in the separation that our goals were different than we were at 21CF. It was because we now had the opportunity to use the full power and leverage of the FOX Network and FOX News on a pricing standpoint and on a full distribution standpoint. And your phrase of bargaining clout those as Lachlan referred to earlier are the two most successful television channels in America right now. So we were able to use that to achieve multi-year pricing for those channels at levels that were at or above what we planned and distribution fully with our distribution partners. So I think those are the two that we were really focused on.

Joe Dorrego:

I think we're ready for the next question.

Alexia Quadrani:

On FOX News you've seen such a great rebound, which given the news environment looks like this momentum will continue. I guess my question is how well can you capitalize on the ratings gross on an advertising perspective? Do you have enough inventory to sell? And then just a follow up on the NFL, any color you could give us in terms of when you think the discussions for renewal might really kick in?

Lachlan Murdoch:

Second part of the question.

Joe Dorrego:

Operator, I think we can go to the next question.

Michael Morris:

On the affiliate revenue in fiscal second quarter you guided to sort of a similar level to what you saw in the first. But you reported that acceleration. My question is can you parse that was it all virtual MVPD driven were there other parts? Did it have anything to do with your new renewals that you done? And is that an incremental tailwind as you move into the step ups next year that will also be beneficial. And then just on the digital side, you’ve been clear about your partnerships with your traditional providers? You have left the door open to doings something digital. I believe that’s the case if or when that the time that that would make sense. If you look at your current content base, do you have what you need to perhaps pursue that or are there specific places that you would still want to bolster to have a product ready? Thank you.

John Nallen:

So Michael, in terms of the affiliate, the combination of what you just outlined. So we got the benefit of an increasing that stub period in the final quarter of the calendar year with a couple of the renewals that we completed last calendar year. The other piece to it is just a little bit around subscriber mix where we obviously talk to the sort of heightened level of growth - the digital MVPDs and given the sort of more recent deal vintage there. The pricing is a little bit better than some of the older deals and so we benefited from that but it doesn't - as I said in my opening remarks we continue to expect that we'll get progressive increases in cable affiliate growth going into this second half of our fiscal year.

Joe Dorrego:

Operator, the next question please.

Doug Mitchelson:

It's interesting to hear you mentioned sort of investments in direct-to-consumer. So I just want to continue along that theme. Is this sort of an urgent priority for the company or something that just want to lean into the next three years - a few years to capture growth? And I think what investors want to know is at what point would you take Fox Broadcast Network or Fox News, put them online à la carte that, maybe a big premium to your wholesale rate? But what has to happen in the broader environment for that to become an interesting pivot for the company. And if I could I was just going to ask John in the weeds question. He had massing around last year, second half the season as well, so you're certain the comp year-over-year on that. But I imagine the ad rates this year are a little bit better than the ad rates last year at any sort of color around sort of ad rate increase on that show would be would be super interesting? Thank you.

John Nallen:

And Doug, just look, advertising I think both Lachlan and Steve touched on that advertising, we just haven't seen markets like this for a while. And each of our products is leading into this, each of our shows and whether it's entertainment or sports. But just as guys you'll remember, the upfront was up 10% and scatter is now up over 20% on top of that. So, it's not like massing. It was fully sold in the upfront, so we're enjoying the benefit of what is a very active market right now.

Operator:

Our last question comes from the line of John Hodulik with UBS. Please go ahead.

Lachlan Murdoch:

I'll let John answer the buyback - the buyback piece. But I mean I don't steal your thunder, John. But we fully expect to spend the remaining amount of $1.5 billion that we have approval to buyback share so. But I’ll let John give some more detail on that - on the…

Lachlan Murdoch:

So - sorry, John. On the political pacing, it's really - it's very strong but it's - we're at the very beginning of it. Obviously we've seen from national advertising from both sides of the political spectrum. On the local side we haven't seen any advertising yet locally from the President's reelection campaign. But of course we’ve seen a lot of advertising already starting to come in from the democratic side. It's relatively short and I think it was reported in the Bloomberg campaign has expected to sort of double its advertising spend earlier this week. But the Bloomberg campaign is buying on a week-to-week basis so it's hard to predict that out. But obviously we expect it to be very strong and particularly as I mentioned in the markets of our of our local TV stations.

Joe Dorrego:

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

Operator:

Ladies and gentlemen, this does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.

Operator:

Ladies and gentlemen, thank you for standing by and welcome to the Fox Corporation First Quarter Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now turn the -- like to turn the conference over to our Chief Investor Relations Officer and Executive Vice President of Corporate Initiatives, Mr. Joe Dorrego. Please go ahead sir.

Lachlan Murdoch:

Thanks, Joe. Good afternoon, and thanks everyone for joining us today on Fox Corporation's 2020 first quarter earnings call. Our first full fiscal year as a standalone public company is off to a solid start with good positive momentum across all our businesses. We've just reported strong financial results, which Steve will comment further on shortly. But perhaps more importantly, we are making significant progress on the operational goals and strategic initiatives that we outlined to you at our Investor Day. Our strategy to build Fox around live sports, news and event programming is producing results and delivering audience growth and engagement faster than we expected. For example, we are now six weeks into the fall season and Fox's establish itself as both the number one rated broadcast network and the only Big 4 network to deliver year-on-year audience growth in the key 18 to 49 demographic and in total viewers. We're up 5% in 1,849 ratings and 10% in total viewers. This leadership position stems from the investments we're making across our network beginning with Fox Sports, which is accounted for 22 of the 50 most-watched telecast in the country since the NFL kickoff. Our ratings are up 11% across our entire portfolio of college and pro football led by Thursday Night with viewership up 22% and our Sunday broadcast which is up 8% to a 3-year high. Another new addition to the Fox Network was the debut of WWE's Friday Night SmackDown on October 4 to an average audience of nearly 4 million viewers. We are thrilled with our WWE partnership as it completes our strategy, the program live content from Thursday through Sunday in the fall. The momentum behind football and WWE continued into the second quarter with a solid major-league baseball postseason, culminating with a historic 7-Game World Series. Fox wins in adults 18 to 49 on four nights, Monday, Wednesday, Thursday and Friday, more nightly wins than any other network. The success of the network extends well beyond sport with our entertainment slate off to a great start, led by two of the top three programs on television. We are pleased to be seeing such positive signs of momentum as we execute the strategy we laid out last May. Our mix of live and near live tentpole content mixed with high quality entertainment is clearly paying dividends. The Masked Singer has returned for second season as the number one entertainment show on broadcast. And 911 is the top program on Mondays and it's the number two scripted program on all the television. And Prodigal Son is the highest-rated new broadcast program on any network this season. In fact, in entertainment programming only, Fox ranks number one over the first six weeks of the season for the first time since 2011. Speaking of number one, the Fox News Network is on track to finish the calendar year as the number one cable channel for the fourth straight year. And as the number one news channel for 18 years running. And speaking of news our station group has continued to expand the already extraordinary amount of local news we broadcast which positions us well the robust political ad market we expect next year. The real strength and value of these distinctive brands is evidenced by the momentum we've had on the distribution and affiliate renewal front where we remain on pace to achieve the targets we’ve previously outlined. We have successfully renewed distribution agreements with Charter, DISH and Cox, along with affiliate agreements with Nexstar, Gray and TEGNA. In each of these renewals, we were able to achieve value that reflects the strength of our core brands. Having said that, we have seen the rate of subscriber declines in the traditional MVPD universe escalate in recent months with this quarter yielding industry declines of over 4%. But it is important to note that the subscriber losses reported by just one distributor, which accounts for approximately 25% of pay television subscribers, represent the majority of the net losses we experienced over the past 12 months. That distributor accounts for almost 80% of total losses over the last year. And without them, sub losses would decrease to about 1.3%, helped by strong gains from the leading the MVPDs. This is important because it suggests that it is too early to draw firm conclusions from a market that is still clearly fluid, especially in light of searching results from our leading digital partners. It is though something we are clearly focused on. Another area of focus is growing the company's digital revenues and businesses. I should mention that we do not include the MVPD distribution revenue in our digital results. The reach of our direct platforms has grown to over 250 million users per month with total engagement grown to over 11 billion minutes per month. Interestingly, we now see well about 10% of our streaming audience consuming the 4K stream. With very positive feedback and we're excited to be the first broadcaster ever to stream the Super Bowl in 4K. It will be a groundbreaking experience for fans. Our digital strategy inclusive of businesses like Fox Bet incredible its crucial to heightened engagement with our audiences, which is already driving meaningful growth. Year-over-year digital revenue has grown over 30% in the quarter and we continue to work to optimize our digital platforms. For the first time ever our Fox News, Fox Business and Fox Television Stations, Digital Properties are all now underpinned by the same text platforms. And FOX Sports' is being transitioned this quarter enabling us to drive improved monetization across these businesses. Of course, driving that improvement also leads us to new business models and new revenue streams. In conjunction with the kickoff of the football season, we launched a free to play Fox Sports Super 6 app nationally, which has already achieved nearly 1 million registered users and almost 10 million plays. The Stars Group is now live with the digital sports wagering service Fox Bet in both New Jersey and Pennsylvania. The proposed merger between Flutter Entertainment, the owner of FanDuel and our partner of the Stars Group will create many opportunities for us. We are excited to develop the Fox Bet brand in partnership with FanDuel and are confident in the dual brand strategy to capitalize on the rapidly growing sports wagering market. Over a month ago, Fox Business debuted a brand refresh across its linear and digital platforms, including a new logo and tagline invested in EU. As part of this initiative, FoxBusiness.com and the Fox Business app were launched with new content and editorial tools to drive engagement. The initial performance of the relaunch digital properties has been encouraging. As we have seen substantial increases in page views and in unique users. A core part of our strategy for FoxBusiness.com is our acquisition of Credible Labs, which closed a few weeks ago. We are now beginning the process of integrating its service with our core businesses starting with Fox Business. While we’ve remained focused on executing against our operational plans, we also continue to make progress towards other strategic initiatives, while maintaining a balanced approach to capital allocation. To further strengthen our portfolio of assets, yesterday we announced agreement with Nexstar to acquire their local television stations in their Seattle and Milwaukee markets. In return, we've agreed to sell them our stations in the Charlotte market, which geographically aligns with Nexstar's existing operations in the Carolinas and in Virginia. It's a great deal for both companies and a rare win-win. This acquisition expand the reach of one of Fox's core assets, our television stations portfolio and further strengthens what is already a highly profitable and cash generative business. This transaction will expand our market presence to 14 of the top 15 DMAs, and importantly, adds two major markets with NFL, Major-League Baseball, Pack 12 and Big 10 teams. Finally consistent with the timing we laid out at our Investor Day, we have today announced that our Board of Directors has authorized a $2 billion stock repurchase program. We are pleased to have the buyback authorization formerly in place as part of our capital took kit. The company also announced its intend to complete $500 million of stock repurchases in the near-term. In light of all the positive momentum I’ve just touched upon, in Light of our success of the network at sports, at news and in our growing station group, in light of our market-leading investments in sports gaming and in the Credible marketplace, and in light of the unique cash benefits of our tax structure, we believe we are undervalued in respect to our peers and to other investment opportunities available to us at this time. This buyback reflects both our confidence in the long-term strength of our business and our commitment to finding the most efficient use of our capital. We remain committed to deploying capital in a disciplined manner to maximize shareholder value to a balanced approach of organic investment, accretive AMA and return of capital to our stockholders. We will not follow a prescribed formula of deployment, instead we will be opportunistic and invest capital where we feel the company can achieve the greatest return on investment. Now, Steve will provide more detail on our financial results.

Joe Dorrego:

Thanks, Joe. Operator, we would be happy to take questions from the investment community.

Doug Mitchelson:

Thanks so much. One question. I guess for Lachlan and John, I’m just curious for an update on the progress on investment spending, how much -- was the September core of a proportion to the year in terms of the investment spending that you laid out at the Analysts Day and how are each of those investments doing Lachlan or you already touched on WWE, but in terms of the program investment and in terms of Fox Nation would love to get an update. Thank you.

Steve Tomsic:

Doug, listen in terms of the amount of investment spending actually deployed in the quarter is actually relatively modest. We called out at the Investor Day, somewhere between $200 million and $250 million of net EBITDA investment over the court to that year. And I would say, less than 10% of that was deployed over the quarter you will see a significant amount of that come through in the quarter we are in now. Because we obviously got WWE that launched on October 4. We are now right in the middle of the full schedule and entertainment programming in Fox Nation, we continue to build in terms of the programming in the marketing.

Operator:

And we will go to the line of Jessica Reese Erlich with Bank of America. Please go ahead.

Lachlan Murdoch:

Great, Jessica. Those aren't tough questions. So I'm happy to take them. So thank you. Look, from an advertising point of view talk a little bit about Super Bowl in a second, but in the quarter, despite some of the comparison that Steve mentioned in his earlier comments, advertising has been quite strong, particularly across the entertainment and sports categories. We had a very successful upfront with entertainment pricing up double digits. And with sports pricing up high single digits, which we be very pleased to achieve. In addition, that one of the critical goals of our upfront was also to set the WWE pricing to broadcast pricing, not cable pricing and we did that very successfully. Categories in the market are -- a number of categories are incredibly strong. The streaming services with Disney, Netflix and Apple are recently being spending good money. The tech sector, Google, Microsoft, Amazon, very strong clients. Pharmaceutical has been strong, they have been moving some of the money between demographics. So from -- some money out of news, but on to -- on the sports and entertainment. And of course the financial services sector. Clients like GEICO, Progressive, State Farm have also been -- being spending good money and supporting us very well. So we are happy with where we’re haven’t mentioned news. News, pricing and the upfront was up mid single-digits. The news market as advertising market is softer, then in entertainment and in sport, we think that’s because of some of the ratings deficiencies at our competitors that are some volume has been given away more cheaply than we would agree to. So we were finding the news market softer than sports and news. Pacing in the -- sorry in the quarter, our scatter pricing was up about 25%. There's very little scatter, so it's a good statistic. And going forward, it is lower than that, but still up -- well above the upfront, which leads us to the Super Bowl. We are well ahead of last year's or so -- we -- obviously we don’t know last year as our competitor, but we’re well ahead of our last Super Bowl, where we were selling at this stage in the year. We're sold out of all of our A positions, and we’ve really good momentum as we continue to sell the Super Bowl. So we are very confident that the pricing will be -- I don’t want to give the number, but they're quite the pricing will certainly be the highest cost per 30 second ad in a Super Bowl to date. So we are very pleased with that. On the NFL, we don't have an update for you terms of where we are with negotiations. Obviously, we're engaged with the NFL everyday as we broadcast their fixtures. And -- but negotiations with the NFL in terms of a renewal of any of the packages has not started yet.

Michael Nathanson:

Thanks. I’m going to ask a couple around Nexstar. So you talk a bit about the accretion math behind the station swap? And do you move to Fox's retrans rate card right away? And is that higher than Nexstar's rate card? And then lastly, beside from rate retrains step ups, if there are any. are there any benefits you derive from getting in those markets. You called out the geographic footprint, but I want to know like what is that drive? What is that benefit you from changing the location of these markets?

John Nallen:

And Michael, its John. Adding those key markets which were pretty well missed, the only one who's missing when you look at our footprint, particularly for the NFL and the other sports we are in, is just a big revenue upside for us. It helps on both national and a local level. And we achieved cost synergies to given the size of the station group that we have, we just would naturally achieve some cost synergies there.

Operator:

Yes, sir. Next we will go to the line of Ben Swinburne with Morgan Stanley.

Lachlan Murdoch:

[Indiscernible]. But look the buyback is just one element of our overall discipline balanced allocation of our capital. So today we're pleased to announce that authorization and the deployment of the $500 million and I'd remind you that this announcement is right in line with the timetable that we had established. It's been well developed by our Board, established in the best interest of all our shareholders and with its adoption ongoing authorizations will be determined as an ordinary course matter with the Board. Now to deal with your question, specifically, while we fully expect to complete the authorization, we won't follow a formulaic approach to any current or future buyback deployment. It just doesn't make any sense to us. So we will invest our capital where we feel we can generate the greatest long-term return and our investment for our shareholders and amongst the various legs of disciplined and balanced capital allocation.

Operator:

And we will go to the line of Rich Greenfield with LightShed.

Lachlan Murdoch:

Welcome back.

Lachlan Murdoch:

So let me just start with Fox Sports One. I would -- politely respectfully disagree with you in terms of sort of any of kind of programming hole. The Fox Sports One programming lineup is pretty impressive. Huge amount of college sports, huge amount of NASCAR, for instance primary home of our NASCAR programming boxing. And so we're very pleased with the programming on Fox Sports One. We will obviously look at continuing to strengthen that as opportunities that are fit with our program strategy emerge. So we are pleased with where Fox Sports One sits today. And I think our distributors are, if you look at the renewals across all of our affiliate renewals, I mean, on Fox Sports One continues to drive increases in affiliate fees and rate. So our affiliates agree with us. And sorry which was the question on ...?

Lachlan Murdoch:

On Super 6.

Lachlan Murdoch:

So, yes, Super 6 has been incredibly successful. If you look at the strategy of any of these Fox spend, if you look at what the strategy was in Sky in Britain and other countries where legalized sports, digital sports wagering has occurred. Having a free to play game at sort of the top of the phone to attract users is critically important, having with Super 6 and the success the very early and rapid success of Super 6, I think bodes very well to dropping from those users down into Fox Bet for pay game. So we are pleased with Super 6 and we are pleased with Fox Bet. I should mention and I didn’t -- I was remiss not to mention this to in response to Jessica's question, already if you look just in the New York, New Jersey market really for the New Jersey sports betting there are already 13 active gaming advertisers. And so, one of the reasons we were quite pleased about this liberalization of sports wagering rules state-by-state is not only do we think we will gain tremendous long-term value through Fox Bet, but also just from an advertising point of view, we are now seeing several million dollars year-to-date already start to flow through in only the very limited number of states where sports wagering is legalized.

Operator:

Okay. And that will be from the line of Jon Hollick with UBS. Please go ahead.