Fox Corporation (FOXA) Earnings Call Transcript & Summary

Welcome to the next session of the 23rd Annual Crédit Suisse Communications Conference. I'm Doug Mitchelson, Crédit Suisse analyst, covering media and the cable satellite and telecom sector. Very pleased to have with us Steve Tomsic, CFO of Fox Corporation, the form as fireside chat. We've got questions that might run the full session, but feel free to e-mail me at [email protected], if you have any questions, and I'll try to work them in. Steve, thanks so much for being here today.

Doug, thanks for having us. It's great to be here.

So let's start high level with the big ones. So there's been a lot of change in the media ecosystem lately, AT&T and Verizon, [ exiting ] media, Amazon buying MGM, Discovery is scaling up. Effectively, one can argue all around you are signs that scale is increasingly important in media, often global scale. So how do you read all of this news at Fox? What does it mean for you? And how do these deals impact your strategic outlook? I'll throw it all in there, right upfront, Steve. Is Fox an independent pure-play in 5 years, in 10 years?

Thanks, Doug. It's so nice to those are the ones you open up with. I think it's to think -- you got to look at Fox. And in some respect, it's the progeny of that thesis, right? Like if you look back at sort of the history of this company in its various forms, we're one of the first to recognize the importance of global scale. So we try to buy Time Warner in 2014, and then that was the thesis that was behind the Disney transaction that closed a little over 2 years ago. So I think we've recognized that trend, and we recognized that trend from a very early stage as the industry has been developing. I think as you look at Fox today and you look at what's driving the trend in terms of scale and consolidation, it's largely around entertainment assets as opposed to what sort of Fox's quarries, which is live sports and news. And I think there's 2 things that distinguish live sports and news from a Fox perspective that doesn't lend itself to this sort of push towards national and/or global scale, which is one thing is both news and sports are fiercely parochial. So it doesn't lend itself at all to sort of a global audience. People will watch U.S. news in the United States, people watch U.S. sports in the United States. But there are very few sports that truly travel globally as being the #1 sport. And so therefore, you really -- with the sort of content assets that we sort of stewards are over, very much about national scale. And then if you look at sort of the kind of the output of all this consolidation, it really goes towards people really sizing up their D2C efforts. And specifically with respect to producing big size streaming libraries. And live sports and news, if you go back to what the consumer actually wants, streaming actually doesn't deliver for live sports and news. It doesn't deliver anything special. Whereas from an entertainment perspective, the capacity at the time shift, the capacity to binge watch, capacity to watch whenever you want without the sort of the restrictions of a linear schedule, make a massive difference to the consumer experience. When you look at sports and news, it's consumed live. You sort of -- it feels funny to watch sports and news on a delayed basis because you think that sort of the world has passed you by as you're watching it. And so streaming doesn't solve a consumer problem when it comes to sort of our core products. And so therefore, we think Fox, sort of the constellation of assets that Fox represents now, is pretty well sort of positioned as being kind of the zig when everybody else is zagging. So no, we think that our thesis is actually proving out from sort of management thinking from many, many years ago.

I take your point. I did watch the [indiscernible] delayed basis yesterday, and I'll take the win even though it's -- I found out a little bit after the fact. So another big picture question. Since Fox has spun out, there's been a clear emphasis on investing for growth. And organically, and via acquisition, how would you articulate adjacencies for Fox's businesses the board is willing to invest in? How would you describe the idea flow? Is there a lot to invest in? Is it hard to pick and choose? Is it all the cheap capital SPACs still utilized as IPO vehicles? Maybe that makes it difficult to find new growth opportunities.

So I think just -- sort of to go back to sort of your initial comment there, I think we absolutely have a bias towards investing in growth, but I think you'll probably get into this later on in the conference, which is around capital allocation. But I think we've been pretty balanced with the way we've deployed capital from both a return to shareholders perspective as well as to investing organically and inorganically. When we've looked at sort of the inorganic side, there's been sort of like a handful of deals that we've done on an inorganic basis. And you can see that there's a pattern building there. You look at it, and we've bought a number of assets that fit around our sort of core verticals. And so sports betting sort of attaches itself to our Sports business, Tubi attaches itself to our Entertainment business. We've bought -- we've done some station trading, which obviously attaches to our TV stations business. And then there's kind of like what I'd say is a broader category that captures -- that sort of crosses across many of those, which is our capacity to aggregate audience at scale and being able to deliver that audience at scale to the benefit of adjacent assets. And so sports betting, obviously, clearly is in that lens. And credible also is in that lens. And so we've been pretty clear about how we see the capacity for us to be able to invest in growth. In terms of the competition for assets and our capacity to get deal flow, particularly with the craze that's been about for the last 12, 18 months. I think when you boil down sort of SPACs, it kind of provides 2 things. One is it's an alternative form of IPO. So it gives the owner of that private asset access to liquidity for their own personal investment. The other piece that SPACs deliver is they come with cash on balance sheet, which can go to investing in sort of the acquired company for further growth. If that's the only thing that Fox brings to the table when we're talking to a potential acquiree, then I don't think we should be involved in that conversation. So what we're trying to do with Fox is, obviously, we provide liquidity, we provide sort of capital to grow the business because we've got a pretty strong balance sheet. But the real story when Fox talks to a potential acquisition target is what can Fox do to sort of expand the art of the possible for that asset? And so that's what we've tried to do with things like [ betting ] and Tubi, which is about when that asset comes into the Fox portfolio, how can we really turbo charge that? And that's what sort of the owner gets excited about when we talk to them. And so I don't think -- yes, there's a lot of competition for deals. But I think the deals that we really want, I think we speak as a very specific language to the ownership to be able to kind of get unfair advantage for that deal flow.

How is deal flow looking?

Deal flow, when we look at -- there's always assets on the market when we look at everything, but we're incredibly choosy. Things have to fit that kind of framework of sort of surrounding our verticals and being able to benefit from sort of the machine that is Fox, which is kind of this audience aggregation, this advertising sales mega tool and sort of our distribution. So deal flow is fine. So -- and if the right asset fits, we've always said we're going to be opportunistic with capital deployment, and we've got a reasonable amount of capital on the balance sheet that we can be flexible with. But as I said, we look at everything but we're fussy.

I want to talk through some of these growth initiatives. Why don't we start with Tubi? So just an update on Tubi's momentum, distribution, strategy.

So to start with strategy first, like the strategy with Tubi was always about -- we looked at how the ecosystem was evolving, and it was clear that there was a pretty big segment of consumers that was going towards a streaming only, i.e., cord cutter, cord never kind of environment. And we saw Tubi as being sort of the free, almost Broadcast Network alternative in the environment that is sort of streaming when people are increasingly sort of up to their eyeballs with SVOD bills, we saw Tubi as a natural kind of attachment in that universe. And so we're pretty bullish and pretty excited about what we've achieved with Tubi and what's still to be achieved with Tubi. The momentum is -- in some respects, it's astonishing. It's both from a usership perspective. So in Q3, we had 800 million hours of total view time on the service, which was up more than 50% from the same quarter the prior year. And the monetization has been truly astonishing. Like we bought the asset, it was run rating at a sort of $140 million, $150 million of revenue. On the last earnings call that we had, we said that we'd do sort of $350 million plus, and it's going to be $350 million with an emphasis on the plus. And so this momentum is significant there. I'm sure you're going to want to talk about advertising upfront. It is front and center in those conversations and gives us another dimension to talk to our advertisers about. So -- and it really stems from the fact that the strategy with Tubi is kind of having maximum library size and maximum distribution. So it's truly sort of ubiquity, plus a huge content offering. It's all powered with technology that is able to surface content that's relevant to the user. And so we couldn't be more pleased about how Tubi is traveling at the moment.

So one thing that's sort of interesting is, just trying to figure out like how big these services can get, how big this space is, what the competition for these viewers are going to be, how you acquire them? You're leading [indiscernible] I think you indicated last week, it would be substantially above $1 billion of advertising in 2022. I think you've got -- you guys have said $1 billion for Tubi in a few years. How would you describe the level of competition in the faster connected TV marketplace? And sort of roll this forward for Tubi for us. How important is scale-worthy services and how many services can win in the end?

So I think that our progression with the asset and hearing what Pluto is saying about sort of their trajectory from a revenue perspective, absolutely validates sort of the category and it's relevant. So there's no doubt about that. What the industry looks like in terms of number of players and how that share splits, I'm not sure. But I think what we -- the unfair advantage we think Tubi has is it is truly the Switzerland of AVOD services. And so it is truly platform agnostic. It doesn't have sort of any sort of bias towards platform because it doesn't sell devices. And so it is truly available on every platform available, whether it be sort of TV devices, the dongles, over the web, or the rest of it. And so we've got absolute sort of distribution capability, and we've got a really, really large library. And so when you then couple with that the advantage of having what we think is a particularly strong technology advantage, which goes towards -- because it's easy to have the big libraries because you can go and access those. But being able to surface the content with the technology and having a true AVOD service that surfaces that relevant content, and the next one and the next one so you stay within the system is important about -- around driving engagement or otherwise you're left in a more curated part of the world, which is not where Tubi actually wants to play. It's a true AVOD service where discovery is really important. So we think this category is going to grow for the long, long term. We see it as being sort of -- as I said at the outset, it's kind of -- it is, for us, the entertainment network of the future. And it's not going to be in the 2 -- in the not-too-distant future. The ad revenues that we get out of Tubi are going to eclipse the ad revenues we get out of the linear Entertainment business for us. And so we see this as happening. If you take a 5- or 10-year view, I think this grows for a long, long time to come.

Yes. I was going to ask you what would you do if that happens, but I'll hold that.

I think it's going to be surprisingly quick given the trajectory where -- with Tubi. I think that, no doubt it's outpacing.

Notwithstanding your comment that it's great to beat Switzerland. I still want to sort of hit back on the theme we have right now, which is everyone sort of bringing their library back in-house and using it for their own direct to consumer services, whether it's fast or SVOD or hybrids or what have you. And so Tubi, you said, has this fantastic library. How sustainable is that not being attached to a big studio?

So we think it's very sustainable. When you look at the library, there in sort of even in the kind of the torrent of consolidation that we're seeing at the moment. We're having very little access to the library that Tubi wants to get its hands on. So that hasn't been an issue. And when you look at the sort of the supplier portfolio that we have that feeds the content, it is a real broad church in terms of content suppliers and no -- there's no one particular supply where we think goodness, we hope we don't lose those guys because they want to hold their library for their own services. And so no, I think from an access to content perspective, we feel pretty confident about where we're at. And we also feel confident that when you look at the SVOD and AVOD services of the competitors, many of them still see the interest in being able to continue to license content to the Tubi's of this world as part of their broader content monetization strategy because sort of monetizing it strictly through SVOD works for really the brand-new shiny titles, but the deep library that sort of Tubi finds greatest value out of is still a pretty open marketplace.

So I was going to ask you what you lost over with Tubi in the next 3 to 5 years. And at the risk of you saying everything, can you just sort of talk about the international opportunity in particular, and sort of what this strategy and the go-to-market and timing of all that is?

So, I'm not -- I'm excited about international, but I don't think it's -- it doesn't sort of peak out sort of immediate interest. So we're in a handful of international markets right now, and we'll be measured about how we sort of deploy Tubi internationally. But if I look at the sort of the top 3 or 4 priorities of Tubi, to say, the next 12 months, sort of this aggressive international expansion is not -- is sort of not in that sort of realm because when we look about what excites us about Tubi. We don't even think we're a base camp in terms of usage and monetization in its core market, which is the United States. And so our capacity to continue to sort of exploit that opportunity, provide more content, plug in, in a more sort of joined up way with the broader Fox ecosystem from a content perspective. The Tubi originals that will come online over the course of this year really give us -- really is where the management focus is. And yes, International will be an opportunity for us, but we don't see it as being an imperative in the next sort of 6 or 12 months, Doug.

Let's get to the question that your investors are interested in regarding Tubi. How much incremental investment? I guess, if you sort of think about how much Tubi made or lost last year versus next year. Given you're trying to drive growth of the business, given you're talking about original content for Tubi. So what's the fiscal '22 sort of investment level in Tubi? And longer term, take us out 5 years, what kind of margin can that kind of business get to?

Yes. So I think on investment, if I look at the 9-month year-to-date numbers and the Tubi kind of impact to net EBITDA, it's a push, right? Like you can toggle these businesses to get to profitability really quickly, which is not where we want to go with this. Like the opportunity is too big for us to squander in terms of trying to meet sort of EBITDA thresholds for Tubi. And so you're going to see us over the course of '22, '23, sort of lean in on Tubi in terms of investment. I won't give you a quantum, but we absolutely want to invest because I think Lachlan said it in either the most recent earnings call or the one before, which is we absolutely want to win in AVOD. And so winning means investing in the opportunity and seeing the opportunity from a 5- or 10 year view. And so we're going to invest in content. We're going to invest in marketing. We're going to invest in user acquisition, and we're going to invest in technology. And so they're all important things for sort of immediate growth in Tubi, but also positioning it so it is the winner in 5 years, 10 years' time. When you look at margin, I think the key factors that go into sort of driving Tubi margin, where can you get revenue trajectory, too? And I think we've been -- you can see where the revenue trajectory has gone even in the short space of time that we've owned the asset. The 2 other things that really drive content apart from sort of margin is you've got sort of a base layer of costs around marketing and technology. And then you've got sort of more variability in the cost base around user acquisition, and that may or may not go up on a unit basis based on sort of the intensity of the competition over the next couple of years. I suspect that, that goes up in the next couple of years as we all fight for getting that next marginal user. But the other piece where you really drive margin efficiencies is sort of is the consumption of content and the consumption of that content in terms of whether it's licensed content, revenue shared content or original content. And so the more that we can price license content and original content and get not efficiency from the production of it all or the sourcing of it, but efficiency from the capacity of knowing that, that type of content is going to appeal to our users and therefore, not have to pay a way sort of $0.50 and a $1 of revenue share, but make it more efficient from our perspective in terms of ROI will be a really important driver of margin over sort of 3, 4, 5 years' time.

So the FOX Bet arbitrations that are way with Flutter, that limits what you can say, obviously, but let's focus on the sports betting opportunity for Fox sort of separate from pricing of any one option contract with Flutter. How is the sports betting market progressing from your point of view? What's Fox [indiscernible] operationally to drive more value for setting an asset? And where are you seeing proof points that you're having success?

So listen, to sort of the people who are new to the story, I think you've got to delineate between sort of where we are directly in betting and where we are from a portfolio perspective in betting. So we have options over assets in betting, but we don't actually -- we don't operate those betting assets. And so we're -- and those options are particularly attractive up to us from an asset value perspective. So we have a 50% option over FOX Bet, and then we have an 18.6% option over FanDuel and that latter point is, to your point, Doug, the subject of arbitration. From an operational perspective, where we do get very involved is in our capacity to drive funnel into FOX Bet itself. And so our biggest funnel from a betting perspective is a user experience an app called FOX Bet Super 6, which is a free-to-play game. As the name suggests, there's 6 questions, you have to guess the correct answer to 6 questions whether -- and we've sort of broadened that. It started off being really directly associated with just sports and picking the results of 6 outcomes from a sporting perspective. And then we've morphed that into sort of more playful things around news to the extent you're going to be playful around news as well as some of our big entertainment assets and, in particular, [ The Masked Singer ]. And so we -- sort of we didn't -- we didn't provide the greatest level of focus on FOX Bet Super 6 in the initial months that we had it. And then when the NFL -- the most recent NFL season started, basically, we said, let's put ourselves to the test and see how much. When you bring the constellation of Fox portfolio assets in the audience, how much can we drive Super 6. And we basically got it from a standing start to almost 5 million users today, which makes it one of the most -- one of the largest free-to-play sports betting games in the market. And so that's an incredibly important piece of the funnel and filter of free-to-play betters into sort of real money wagering. When you look at that, that will only grow importance for us because when I look at FOX Bet as sort of the beneficiary of that funnel. FOX Bet is only in 4 markets, whereas FOX Bet Super 6 is a truly national free-to-play game. And so as more and more states legalize sports betting as FOX Bet marches into more and more states, then the relevance of that funnel will only increase in importance. The other thing that will only increase in importance as betting gets to national scale is the sort of the broader might of the FOX Bet sort of -- not, sorry, the FOX Bet, the broader might of the FOX [ Promo ] platform, the true linear platform, being able to drive usage of FOX Bet. And so I think we've made pretty important strides on the betting side of things. And so -- and you'll continue to see us do things sort of imaginatively on that, and we're going to continue to lean in on. So our most recent sort of look in the betting landscape with OutKick, which is an important affiliate driver. So we bought the Clay Travis business there. And so that will, again, sort of feeds into our capacity to be sort of this enormous funnel into sort of the betting landscape.

So the thing on the sport betting assets that's super interesting is the debate that we all have as to what the value is and I think Fox Corp. can do. Do you think that can help investors understand the value of the sports betting assets? I don't know if it's sort of just the clarifying catalysts that are coming up? Is there sort of a different structure? Any data points that you would offer to help everybody sort of come around the right dollar amount from your perspective?

So again, like, listen, I think from our perspective, as a media company, we've been the most front-foot from a sports betting perspective versus any other one of our peers. And so there's no doubt that we see value in sort of asset value. Right now, I can't do the usual thing, which is to point to the EBITDA in the P&L and point to KPIs that say this is what FOX Bet is doing today. And so therefore, there's a read across into earnings and multiples, the rest of it. You really have to, and it's incumbent on us to sort of illustrate, but we're going to illustrate the asset value that is in these options, which is always a tricky thing to do because it's not only asset value that sits below the line -- not even below the line, it's outside of our P&L completely. But it's option value in the asset. And so we're -- I think we'd probably have to do a better job. But I think a lot of the street is coming around to actually recognizing our position here. I think some of it gets clarified once we get sort of a decision on arbitration around a FanDuel stake and what value that is. I think that's one point that we enjoy a straight stake in the ground and say, okay, that's what that number is. And that's going to be an important part of our sports betting portfolio. And the other piece is as Fox -- remember, FOX Bet is -- started from nothing sort of 18 months, 2 years ago. And so as that develops into a more important asset, more important sort of operator within the FOX Bet landscape -- of FOX betting or betting just generally inscape, I think that people will be able to get a pretty clear feel as to how important the betting assets that we have are in the portfolio.

All right. Got it. So other investment area has been FOX Nation. Want to give us an update on strategy, level of success so far? And how should investors think about the need to invest in that potential?

So Nation started as sort of the ancillary service or a supplementary service for the FOX News Super fan, right? And so in the first sort of 12, 18 months, the content was geared towards that FOX News Super fan. Over the last, I would say, 6 months, kind of proved that it serves that community. But what we've also done in parallel with that is I think we've become much more conscious of FOX News, having a capacity to have influence, not just from a news perspective, but on a much more broader portfolio programming because the audience is incredibly loyal and incredibly willing to sort of consume content that FOX News, the brand, the overall sort of FOX News Media landscape serves up. And so with those 2 things coming together, we think that there's a much broader type of programming that FOX Nation can get involved in and serve its audience and drive subscriber growth and drive that sort of continued loyalty that FOX News Media portfolio of assets. And so you will have seen over the last couple of months, we've sort of expanded our relationship with Tucker Carlson, so he produces daily, and then every so often sort of Tucker Carlson [ Daily ] and Tucker Carlson Originals. And so that content has had sort of amazing sort of resonance with the FOX Nation subscriber base. Things like Dan Bongino has come on board. And again, that's had great relevance. But then we look at sort of if you stretch the kind of genres and categories of content that's in Nation, we're seeing that that's also having a really strong impact on users and dealership. And so things like Crime & Justice and even lifestyle are gaining resonance because people who come to FOX News and people who come to FOX Nation, trust the brand and they want to sample what that brand has to offer. And so we think that taking the strength of that brand and then giving FOX Nation a broader set of content assets to be able to drive subscriber ship is going to be really important. So you'll see us over the course of the next at least 12 to 24 months, continue to invest in content, whether it be newly acquired content or taking content, not so much taking content from the linear channel and putting it into Nation, but being able to get more value-added to the linear sort of channel and putting it. So you've got -- PrimeTime Anytime is a great example, right? We put last night's PrimeTime on Nation the next morning, and people will devour it. And so we think there's a lot -- we've seen a nice little uptick in subscriber growth since we've made these content initiatives. And so we're going to continue to lean on that open door and continue to provide subscribers with a lot more content to sort of -- and marketing so that people actually know about the service to continue to drive growth there. So I think the short story there is we want to go from it being just a way to super serve the Fox in -- the already Fox faithful to a much broader kind of content environment, much broader subscribership.

Okay. That's interesting. And then I wanted to continue on streaming. Because I know you're asked it every quarter, and at every conference about streaming and going directly to consumer. So I wanted to try it this way. So do you have everything already sort of lined up to launch a Fox broadcast sports and/or new sort of over-the-top streaming service? Is -- the more you have to do, whether it's Fox's ability contracts or sports deals, we sort of just wonder how fast can you pivot to streaming if you decided to do so for the broad Fox portfolio?

Yes. So we do get asked a lot, right? And so I think it goes back to your initial question, right, which is -- so you got a whole industry that's going towards streaming. And as a result of the streaming, they're going towards consolidation, all the rest of it. And I go back to the same point I made at the start, which is what are we actually solving for from a consumer perspective? I don't -- not much in the case of sports and news in terms of delivering that on a streaming basis as opposed to sort of the traditional model. So I go back to sort of -- when I look at when -- if and when will we launch a new sports entertainment streaming service, I think it goes back to distribution strategy where it's distribution at large. And so right now, we feel as though the consumer is being really well served from our perspective, from serving up news and sports and our entertainment services, news and sports in the traditional bundle. As more and more services are sort of try and have a foot in both camps by having sort of like a set of channels in the linear bundle and taking a lot of that same content and effectively simulcasting on their own SVOD/AVOD services. We think that if we're going to stay relatively exclusive to the bundle, then we should, from a distribution perspective, get outsized share of wallet in that environment. And so to the extent to which we would make the decision to move is the extent to which we either think that there's a big sort of extension of reach or an extension of monetization by switching over from being sort of linear-traditional dominant versus being sort of streaming plus linear and -- plus linear. And so I think that's our decision point. To go to your question around do we have everything in place to be able to switch over? The short answer is yes. Like the most recent NFL deal we had, which is the most important contract that we have in the company. Gave us all the flexibility in the world in terms of being able to take that Sunday NFC package and be able to do it on a linear basis, on a digital basis. All the things that our sort of peers are talking about, we have the capacity to do. And so we have sort of the technology stacks to make that happen because we've got various forms of streaming services paid for free. So really, it is about sort of realization of what that product would look like in terms of flicking the switch, but all the sort of the raw ingredients to making that product happen and readily available. And so we can make that happen. But from us, from our perspective, it goes back to distribution strategy and how we can serving the consumer as opposed to everybody else is doing it. So therefore, we should do it.

All right. That's helpful. And you mentioned earlier that I might ask you about the upfront. So it's that time. Let's talk about the upfront. So NBC was on earlier and said they've pretty much wrapped up. We had a panel this morning that said, well, there's still sort of a few weeks of negotiation left. And so how did Fox do? And are you done?

We're not quite done, but listen, I think the short answer, I think it's been well reported over the last sort of days and weeks. I think in the upfront has been one for the ages. It's like our guys are saying they haven't seen this kind of strength for close to 2 decades. And so it's been really -- it's been a great time to have sort of big advertising assets and big advertising platforms to be able to sort of benefit from that kind of industry environment. And we're seeing it across all 3 verticals. And we saw it happening actually sort of over the last couple of months because our scatter pricing, particularly with respect to entertainment, because most of our support is done through the fall. But as we looked at scatter going sort of February, March, April, it was off-the-charts strong. And so we saw this coming. And so we've seen it across Entertainment, Sports, News and Tubi. It's across multiple categories. Obviously, tech and sort of derivative tech. So the extent to which auto manufacturers, traditional auto manufacturers want to market EVs, then they've been strong in the market. Financials have been strong. The streamers have been strong. We've seen sort of the return to normalcy kind of industries all been strong, whether it be sort of food and beverage, travel, theatrical, and so it's been a huge tailwind. And so we've -- we're close to done. I think when it's all said and done, we will have sold a pretty similar amount of volume to what we did sort of in prior years. So we haven't sort of over indulged, so to speak, because we think that this strength is going to continue. And I think it goes to -- from our perspective, when you look at the assets that we have and being able to deliver mass audience with the Broadcast Network or real loyal audience with respect to News, really all is well for us to be able to sort of continue to drive advertising pricing. And so it's been -- it's been manna from heaven for us. So it's been great.

Why don't we switch over to the other sort of big revenue stream, affiliate revenue? I think it's been at least a decade now on my experience, distributors saying they're not going to -- they're going to hold the line on rate increases for linear networks. And it hasn't really happened yet, but the latest is retrans coming into focus. Is there a ceiling to what broadcasters can get for retrans fees? And can you walk us through what investors should expect for revenue growth in fiscal '22 and beyond?

Yes. So on affiliate, I go back to what I said earlier, which is we've had -- when you look at Fox and then you look at our peers, it's important to differentiate that Fox has been sort of a friend to the bundle. It's been a friend to our sort of affiliate distributors of the network. And so where -- when you look at outlook for us, so for fiscal '22, remember we're at June year-end, we're actually incredibly light from a renewal perspective. So less than 5% of our overall affiliate revenue comes due for renewal this coming -- the fiscal year we're about to walk into. And so our kind of affiliate revenue growth is going to be much more driven by where you think subscriber growth or sort of attrition is going to land over the course of the next 12 to 15 months. We have kind of the in-contract increases, but they're relatively modest in comparison to being able to drive sort of reprice on a renewal. And so fiscal '22 should be pretty sort of quiet from an affiliate growth perspective. We're still absolutely on track to deliver the $2.65 billion of retrans and reverse comp that we set out at our Investor Day all those quarters ago. And so that's not an issue for us. But as we sort of front up to sort of the renewals that will take place in fiscal '23 and beyond, we now do that from a position of certainty with respect to virtually the whole portfolio of sports asset we have. Charlie has done a fantastic job with the network so that the Broadcast Network is number one. And then you look at News, which has just been a juggernaut, and we're going into a midterm in a year and a bit's time. And so that's going to be an amazingly relevant asset for us as we go into these sort of big renewals in '23, '24 and beyond. And so we would expect that just with the strength of those assets, we should have sort of really healthy pricing growth. And then relative to competitors who want to have a bet each way on linear versus digital. We think that if we're going to stay sort of attached to the linear bundle, then we need to get better share of wallet. And that is what the objective will be.

So what are the big sort of growth in margin swing factors as you look at fiscal '22? And I'll give you some room to work with, I'll throw sort of a couple of things in there. I think that certainly, you've redone -- done some sports contracts and the sort of political ad revenue sort of comes in and out and maybe you could also look beyond fiscal '22. But what are the big swing factors for Fox that we should all be focused on?

Yes. So I think if you look at '22, we're obviously coming out of the political year. And political for us actually means 2 things. One is the direct political ad revenue that we write at the TV stations, which was a record year for us and a record year by a margin. And so therefore, that's just not going to be there for us in fiscal '22. The other piece to political for us is that it's an enormous driver of audience, particularly at FOX News. And it's not just FOX News, the linear channel, but it's FOX News, the digital service, sort of the internet side. And so that -- there's no doubt we've called it god knows how many times through earnings calls that we're going to have a lull in audience. So our share is going to be fantastic, but the absolute level of audience is going to be lighter in fiscal '22. So that comes out, you've got the natural sort of growth in the business, whether it be from continued sort of growth in affiliate revenue. We've talked about just the outright strength of ad markets, and we would expect audiences, particularly in sports to come back versus the levels that we've seen last year, where you had sort of weird schedules, you had schedules collapsing on top of one another between different competing sports. And so we'd expect with crowds and stadiums, normalcy to schedule, we'd expect to see ratings improvement there. But then -- so that goes towards what you do sort of the negative of the political headwind offset by sort of natural organic growth in the business. And then you're going to see us invest in the business, right? We're going to -- I've talked about investment in Tubi. We're going to invest in Nation, we're going to invest in FOX Digital, we're going to invest in -- sorry, FOX News Digital, we're going to invest in our Weather service. So I think there, the puts and takes through fiscal '22 as then you look beyond into fiscal '23, I think the biggest factors to be aware of is, from a fiscal perspective, we move into the mid terms. And so with kind of a delicate balance in the house and the Senate, you could expect that mid turn and political advertising is going to be pretty strong. And so that should be a tailwind for us. We have a tailwind of about $350 million to $400 million from an early sort of transition out of Thursday Night Football, which is going to be helpful to us. And then you go in -- and we're still not into the new contract of the NFL. So if I look even further out in terms of just the fiscal '24 is then when the new -- you don't have the free comp of Thursday Night Football being a good guide for us, then you move into fiscal '24 where Sunday -- the new Sunday NFL contract kicks into gear. So I think they're the big puts and takes. You've got other bits and pieces around that. Whether it be a Men's or Women's World Cup year, but sort of they're the big swing factors.

And last question for you, $5 billion -- $6 billion in cash, excuse me, sitting on the balance sheet. A couple billion dollars a year, give or take sort of getting generated. We talked about M&A earlier and I'm sure your priorities and capital allocation haven't changed. I probably just enticed you to read them for us, but what's the right amount of walking around money for the Board and the management team?

Listen, there's no doubt that the balance sheet -- the balance sheet at the moment in terms of the amount of cash we've got sitting there is a bit of a legacy from us taking some protection at the start of COVID. So we raised $1.2 billion of debt. In January, we got a $750 million maturity, which we'll pay down from the cash on the balance sheet. And we're going to be balanced about the -- sort of the balance between using capital to return money to shareholders versus organically investing in the business and inorganically investing in growth. And I think we've shown that balance over the course of the last couple of years. So by the end of this current fiscal year, we will have sent back $1.6 billion in buybacks to shareholders. We have done $700 million of dividends. So that's $2.3 billion of return of capital to shareholders. Meanwhile, our net M&A spend over the -- since the inception of the company has been about $1.1 billion. And so I think we've been pretty balanced. There's no doubt that there's -- we've probably got in excess of cash, and we'll look to sort of take that down over the course of next year or 2.

All right. Well, with that, I think we've sort of covered the gamut. Steve, thanks so much for doing this and taking your time today. Really a great conversation, and look forward to doing this in person next time we get together. But again, thanks so much for your time.

You bet, Doug. Thanks for the opportunity.

And we're out. So thanks so much. Look, it's -- you might be...