Fox Corporation (FOXA) Earnings Call Transcript & Summary

[Audio Gap] To have Steve Tomsic back, CFO of Fox. Welcome.

Thanks for having us.

Great to see you in person.

Exactly.

After our last one was Virtual.

So let's just start with the kind of a strategy question. The industry has gone through so much change since New Fox emerged in 2019. I mean we've gone through COVID. We've had significant declines in the pay TV universe in those -- in the last 3 or 4 years. The industry is pivoting to direct-to-consumer or streaming. There's been -- or maybe should be consolidation, more consolidation. Obviously, a bigger focus on profitability and streaming as opposed to just subs. So I mean I could go on and on. But given all of the changes happen since your company, your new company has been formed, how does that inform your strategy? Has it changed at all?

No. And you add all of those secular changes to what's happening macro and you add to that the geopolitical environment, and it's been a very tumultuous 4.5 years since we split, right? So our strategy, we think our strategy is uniquely advantaged. And it's the same strategy that we had when we separated the company. So the logic in separating the company was SVOD needed scale and SVOD is a different distribution mechanism versus sort of the content that we have, which is more linear live. And so as part of the Disney transaction, we created a company with Disney with the combination of 21st Century Fox assets that allowed Disney to compete on the SVOD stage in a really, really major way. And they've gone ahead and done that. The parallel with that was it enabled Fox to focus in on the things that sort of were core to the linear bundle but also core to sort of the cultural conversation in the country, whether it be live sports and live news. And so we're focused in on that core and have had amazing success in driving audience and in driving monetization. And so you look at it at the end of a 4.5-year period with all the things that are going on in the industry as well as all the things that are going on macro, we delivered our best ever year in terms of revenue last year, invest every year in terms of EBITDA. So revenue up 7%, EBITDA up 8%. While we're focusing in on the core we're building around our adjacencies. So building from where we have strength. So sports, we have developed really, really significant investments in sports betting. We've created the USFR, which gives us sort of more legs to the stool in terms of a sports franchise. In news, you've seen the FOX News channel go from being just a narrow linear channel to what we now call FOX News Media. So you have news and businesses linear channels. You've got a really significant sort of website both from audience as well as monetization. You've got nation, you've got weather, you've got audio, you've got books and then when we look at the other pieces to our business, we had an entertainment business that obviously had a challenging competitive environment given how much of a shift to SVOD that we've seen in entertainment. So we've pivoted what we've done with entertainment, making bets on the verticals that we think we can win in. So things like food or pop culture with Ramsay and TMZ, respectively. And then from a macro perspective, with respect to entertainment, invested in Tubi, which gives us what we believe to be the digital sort of broadcast network of the future on a free advertising supported basis. And Tubi is absolutely flying at the moment and it has become as big as the national entertainment network. So the strategy that we had when we first launched the company 4.5 years ago, probably remains more valid than ever given sort of the value of our concentrated assets and the execution has been fantastic when we look at sort of all the key KPIs and how they then funnel into financial metrics. And you look at that and then that sort of exposes itself in terms of the strength of the balance sheet that we have, right? It's a fortress of a balance sheet, which gives us lots of optionality with respect to capital allocation going forward.

Right. So you, of all companies, are the most exposed to the linear universe and Charter took a very unusual public stance last week stating the video distribution model needs to change. So a couple of questions there, like do you agree with this? What would your response be to that? Like what's the Fox view of how the system evolves over the next 5 years?

So I think it was a really interesting dispute. I won't comment specifically on the dispute because I'm not involved in it. But I think pay TV largely is in a state of transition. I think if you look -- you go back to sort of what is being served up to the consumer. And I think right now, it's suboptimal both on the linear side as well as the digital side. And I can see world where like the Charter deal in some respects, tries to converge linear sort of video assets that are best transmitted sort of on a linear basis as well as bringing in the blend of digital with the addition of things like Disney+ and ESPN+ to their bundle. One of our bugbears in terms of being in sort of at the moment, exclusive to the linear bundle is the fact that the linear bundle has expanded in terms of channels. And the price points continue to expand, which makes it difficult for the consumer to sort of continue to afford that. On the other side, on the digital side, you've got this proliferation and fragmentation of D2C services, which are equally consumer unfriendly, right, particularly when you aggregate the prices of those. And so I think where we want to get to is some sort of combination of using linear where linear is most relevant, particularly for sports and news with respect to us. We are 2 of the top 5 networks in the country. And so we would expect our assets, and it goes back to our focused strategy of our assets being carried on multiple platforms. And it's just from a Fox perspective, getting a product that is much more friendly to the consumer, both in terms of price and what's in the offering is super important because we've got the confidence that our content is going to be carried in any mass market consumer proposition. And so what we want to get right is the consumer proposition and whether that's linear-only or a combination between linear and digital delivered sort of assets is we're sort of ambivalent. We're not defined by sort of linear carriage. We know that our content will find a home wherever that sort of distribution footprint works.

Right. But you still are very committed to that linear bundle, and you've gotten favorable rates because you've been -- you're not diluting your content across so many platforms. But others are hard. And so doesn't that like concern you that it just disrupts the entire system that you could be negatively impacted because of what others are doing, not necessarily what you're doing?

I don't think what others are doing from sort of disruptive behavior is anything new. I think when we look at choices we have made with respect to distribution, we start with -- well, how does the consumer want to receive our content. And right here, right now, the most efficient, effective way for a consumer to receive sports and news is still in the bundle. The best way that we monetize our content remains in the bundle. That may change over time and we'll adapt to that, but we still think that a bundled offering to the consumer where sport and news will become the bedrock of that is the best way to get to the consumer.

So the interesting thing about the Charter Disney resolution, like some people think it really make them losses because so much is contained. So look, I guess that's the question like what's your view? Does it stem the losses or just the current trajectory of pay TV declines continue? Like do you have a house view? And how do your negotiations? Like how do your conversations change in the next round?

So our negotiations probably don't change because -- we don't have a -- we don't have a sort of abet each way on our content, right? At the moment, we are sort of dedicated partners with linear distributors at the moment. The fact that our content is so coveted by those distributors as well as the end consumer means that as others have bets each way, it's incumbent on us to get a higher share of wallet those distributors in order to justify the fact that we remain in that bundle. But I have no doubt that there will be sort of more modernized bundles. Our hope is that if Charter says that it has achieved all of its commercial objectives in the Disney transaction. Our hope is that, that is reflected in the way they go to market, the way they price their video offering and ultimately in the sub trajectory that we see from them as well as the entire industry. I don't think we're holding out for it. Our expectation is that subs continue decline. But we would hope that this starts to sort of stem that tide of decline.

And on the sports side, there's been a lot of talk about it's going directly to consumer. And ESPN+ is bundled in this resolution. So and Warner Brothers has said that they'll introduce sports into MAX very soon. So what is the Fox point of view on the sports bundle given you a strong portfolio?

So the delivery of sports in the and the exploitation of sports rights in America is different to other markets, right? So you don't have -- no one has a monopoly on any one sport, and no one certainly has been poly across all of sports. And so if somebody goes it alone from a sports perspective, the sports fan is going to feel unsatisfied by that offering in and of itself. There are other models internationally. So my home country in Australia has a model called Kayo, which is the conglomeration of a lot of different sports providers or sports networks that fall under the umbrella of an overall sports delivered service. But the way that sports -- the way that service is delivered, the pricing of that service is complementary to the sort of the core bundle. And so I'm more skeptical of any individual provider going D2C with sports and that being an enormous subscriber opportunity or revenue opportunity. Because if you're a sports fan, you want more than just Monday night football, you won't Thursday, Sunday night. So -- and if you're a sports fan, you probably want more than just NFL. And in order to be able to capture all of that, you're having to aggregate across number of different providers, which when you start to add up the price points because sports is expensive. By its very nature, it's expensive. And so when you add up the cost of being able to capture that at a retail level, you've actually got better value in being able to consume that through the bundle and probably even better value as that bundle sort of continues to evolve to being a much more contemporary kind of service. And so I can see a world where the ESPNs of this world do go D2C, but I'm not sure how impactful that will be for us or your entire industry. If there is the emergence of some sort of sports bundle, that is across different network providers then the first port of call is going to be Fox, right, in terms of people wanting to aggregate our content with their service just given how strong our sports offering is.

Right. So let's going to your current trends, starting with the distribution. We already talked about pay TV sub declines, which have accelerated. We'll see what happens post this agreement. But what offsets do you have to cushion the blow of lower -- of declining subs?

So we we're seeing declining subs since the emergence of Fox, and that's continued to be the case. As what we've endeavored to do and being successful in doing is being able to get a higher share of wallet from the distributors, which we see in terms of affiliate rate pricing, which has more than offset the subscriber declines. And we would expect that to be able to continue to drive industry-leading pricing across our networks. Our networks are only getting stronger and more impactful from a consumer perspective. And so I think that's the main offset for us. Now we'll see how the bundle develops and whether that ameliorates the rate of loss in terms of sub, but we would continue to expect to see overall affiliate revenue growth. We've got we got through 1/3 of our affiliate renewals last year. We've got another 1/3 this year that we're well on the way of doing already in the course of this fiscal year. We do that without sort of one of our distribution partners calling for an analyst call to talk about the Acrimony. So we -- when natural naturally aligned with our distribution partners. And so we get things done. We do it quietly and you see it come through in the P&L. And so we're pretty proud of the achievements. You'll see us continue to grow affiliate revenue. I think terms of this fiscal year we're in, you should expect to see that in the second half of our fiscal year, the year ending June '24, and you should expect it to continue to be biased towards our TV segment.

So turning to advertising. Are we at the point yet where brands are starting to return to the market since the recession we've all been waiting for may never happen. It's like the most call for recession that just is not appearing. So is it paralyzing the market because everyone is waiting for it? Like what do you think and what do you assume?

We're different? I missed what Gunnar said about the advertising environment. So looking at our book, actually, not much has changed since our earnings call in August, right? So the bid for sports remains remarkably strong, right? There's no notion of recession from an advertising perspective in sports. So we saw that in terms of the cash sellout on Women's World Cup, we've seen that extend into MLB. We've seen that extend into college football, and we're seeing it in NFL. So sports bid remains exceptionally strong. Entertainment we took a lot of risk off the table in terms of upfronts and being able to commit volume there. The scatter feels like it's just finding its way. I think from a scatter perspective, entertainment is -- linear entertainment for us is a relatively small part of our book. So what we're seeing there is people -- I think advertisers are still waiting to see where schedules finish up with respect to the strikes and sort of will place their money once there's more certainty around that. News there's a mix of factors going on. So from news, we've got the headwind of we're comping against higher ratings this time last year than we have this time this year. And we're comping against -- we've talked about this for at least the last 2 and perhaps 3 quarters. Direct response pricing has stabilized on a sequential quarter basis. But on a comparison versus prior year is still down, which is what we've seen over the last couple of quarters. So should expect that to be a headwind for us from a news perspective. National news has been pretty solid. And with the revamp of our prime time lineup. We're a lot more advertisers sort of lean into prime time use for us, which is really encouraging. And then the sort of from a local perspective, we're obviously comping against a very significant midterm political collect last year. The base market is up. It's being driven by things like auto. But then there are some categories where there's natural headwinds. So whether that be retail, betting, which is where the money is moved from local to national. And then the final -- not the final piece, but one of our most exciting pieces of the advertising puzzle for us is Tubi, which continues to grow like a weed for us. And I'm sure you want to get into that over the course of the discussion, Jessica?

Yes. So let's start with -- on Tubi in the [Gunner] news. But on Tubi, like it has done incredibly well, surprisingly. It's just really been very strong.

Surprising for you?

Well, I mean it was a relatively small player when you bought it, and it's kind of -- and you've surpassed everybody else, maybe that's the better way to say. So what role did Tubi play in the upfront discussions? And can you talk about how you see it evolving? Like how important an asset can is? Because you talked about it being your digital broadcast network.

No. Tubi was like for anybody who saw our upfront. Tubi Is front and center in terms of the presentation at our upfront. And it was also front and center in terms of our discussions with the agency. So we saw more money placed with Tubi than we've seen in prior years. But Tubi is an important asset in our portfolio and is going to continue to grow to be an even more important asset in our portfolio. So if you look at where we're at with Tubi, the fiscal year that we just closed. Engagement was up more than 50%, and revenue growth was I think 33% for the year. And we're seeing just in the quarter that we're almost at the end of now, we're seeing numbers on both of those metrics in similar kinds of codes. So we're really, really excited about the growth. People often ask whether Tubi is incremental to our book or are we just kind of reallocating dollars across other parts of the portfolio. It is absolutely incremental. In fact, when we compare national entertainment network advertising versus Tubi, Tubi has already surpassed that business. And so it is a juggernaut. It is -- when you look at the -- now Nielsen does a ranking every month, and it's now level with HBO Max in terms of engagement. It's only going to get bigger and stronger. Our monetization is running behind in terms of versus viewership. And so look at what the hard levers are to pull in terms of growing that asset, the hardest thing to do is get views and get them watching. The monetization will come and the monetization is running behind because our fill rates are running -- are lower than where we want them to be, and our CPMs are lower than where we wanted to be. But of those 3 metrics that drive revenue. I prefer to have Tubi flying and have our ad sales force catch-up in terms of fill rate and CPM as opposed to the other. And so we're very excited about the market opportunity for Tubi. The founder moved on [indiscernible] moved on, and we have Anjali Su,d, who's literally a couple of weeks old in the company. And so she's going to bring a fresh perspective, fresh ideas to be able to take that asset to the next level. But sitting here now, we're excited about what that asset can do and we'll continue to invest in it over the course of the next couple of years.

So just one more question, Tubi, just maybe a follow up on what you just said. But I guess from an averaging perspective, what can you give offer advertisers now that you couldn't before besides more engagement? And how do you see that evolving over time? It's obviously a key asset that's going to grow.

No, I think there's still room for us to better -- we've kept -- one of the mantras when we acquired Tubi is let's keep the Tubi in Tubi. So Tubi is run as its own kind of end-to-end business to see more integration from a tube ad sales perspective with our sort of national ad sales force in order to sort of bring an even more unified view of Tubi with sort of key advertisers, and we're well on the way to that. But with respect to -- Tubi speaks to a different consumer than sort of traditional Fox. So Tubi is more an adjunct to people who are not in the in the bundle. So you're immediately getting a different consumer there. Tubi speaks to a younger demographic and a more diverse demographic. So when we present to advertisers, we're able to present a much broader spectrum of consumers going from sport news, which skews traditional to sort of Tubi, which gives much more contemporary. And so we think that's a powerful combination to go to market with.

And all of the advertising is under Marianne. So it's...

Yes. But Tubi is still very independent in terms of -- from an advertising sales perspective.

Okay. So moving on to FOX News. You had a very active fiscal '23 and '24 looks like another busy year, but more hopefully because of the presidential election or something else. So can you give us an update on how ratings are trending since you've made some of the prime time lineup changes? And will that -- is it already resulting in more advertising opportunities?

Yes. So listen, we're really -- like we obviously had lineup changes. And we have always -- we've seen lineup changes in the past at FOX News. And for whatever reason, like we are resolute in our belief that the brand and the all-encompassing nature of the FOX News service is far more impactful than any individual on -- in the lineup. And so we've proven that time and time again, but people continue to be skeptical of it. We introduced the new lineup. I think it was July 14 and so -- so when we look at when the lineup -- when the previous lineup was in place versus what's happened since July 14, our sort of overall ratings, P2+ are up by 1/3 our ratings in the demo. So 25 to 54 are over 50% higher than where they were. We're still down versus last year, but we're building into season, and we're going to build into election season. And so that's only going to grow. And then if you look at it, Jesse Watters, who took on the 8 p.m. slot is now #1 in prime time. Hannity's numbers continue to grow. Gutfeld's continued to grow. And we -- and people probably overly focus on the prime time lineup. But if you look at across the day part, we are super strong. So the 5 is consistently the #1 rated us hour across all of news or across all the cable news. And so when you look at the strength of the linear asset engagement on the digital properties continues to grow. We feel really confident about FOX News prospects sort of the remainder of this fiscal year and absolutely into next fiscal year when the presidential election will be on young and old.

So let's just talk a little bit about fiscal '24. We went through all the reasons why fiscal '23 was such a banner year for you. I mean it's credible between the affiliate renewals, the Super Bowl, political, World Cup, et cetera, et cetera. So you're lapping a lot of this and you also have step-ups in NFL in big 10. Can you kind of walk us through puts and takes for fiscal '24, how we should be thinking about it?

Yes. It's one of the challenges in following this because what makes us so powerful as a consumer service is these massive events that we're front and center of, and we've just come off a super cycle of massive events in terms of midterm elections, a Super Bowl and in Men's World Cup. And so some of those are more impactful top line versus bottom line. But Super Bowl, we wrote I think, around $600 million growth in revenue, which is obviously not going to repeat itself in fiscal '24. A lot less of that drops to the bottom line just given how expensive Super Bowl is from a rights amortization perspective. From a soccer perspective, I should say, you've got the FIFA Men's World Cup, which washes with the fee for Women's World Cup. But then towards the end of our fiscal, we've got our inaugural broadcast of the UEFA Finals. And so that will be a negative from an EBITDA perspective. Staying with sports we've just renovated our college sports rights. And so you should expect us to be able to get a bit of margin back from that, particularly in our cable segment there. And then you've got the tailwind of this continued ramp in affiliate revenue, which, as I said earlier, we expect to see more in the TV segment and more to end towards the end of this fiscal year. So that's sort of what I'd call, obviously, political is not going to be there in this coming -- or the fiscal year that we're in now, and that was like a $260 million tailwind from a revenue perspective at our local stations. But we expect the base to be a little bit better at our local TV stations, which ameliorate some of that loss. And then the other piece is what we call our investment businesses. So assets like Tubi, Nation, Weather, Credible, where there, the overall envelope that we invest in those businesses, we expect to come down somewhat in fiscal '24 versus fiscal '23, albeit within that portfolio, we are sort of maintaining our investment in Tubi and we'll see how to be developed over the course of this year, but we sort of retain the right was to be to continue to invest even more if we see the upside in the revenue.

There's a lot going on.

There's a lot going on, which is the frustrating thing like people sort of -- you can have up years down years because of the nature of just the massive cyclical events for us. But when you look at it, it just goes to the underlying heart of the business and just how strong we are in.

So you were very early in sports betting as a company. And you've recently announced plans to close FOX Bet. Can you give us the rationale behind that decision and whether we should interpret that as a strategic shift and how you're thinking about sports betting?

It's absolutely not a strategic shift away from sports betting. We still remain super excited about the sports betting opportunity in this country. I think what it is, is is a rationalization/consolidation of our interest in sports betting right now. And so when you look for the uninitiated, when you look at our sports betting investments or quasi investments, FOX Bet was the smallest piece of it. And it was a virtual joint venture with Flutter, where they had funded it, and we had an option to buy in. It became clear to us that Flutter was more aligned in pushing FanDuel. FanDuel had a better opportunity in the market and really pushed ahead with FanDuel and FOX Bet was always going to struggle to find its place. And so we came to an arrangement where FOX Bet will be is in the course of winding down. When you look at what we're left we're left with, I guess, 3 things. One is we've got -- we continue to have an investment in top coat Flutter, which is worth $800 million to us, which I think goes unnoticed in many valuation models. We continue to have a 18.6% call option over FanDuel. And so would have seen a significant recovery in asset prices around sports betting, depending on where you see FanDuel in the sum of the parts valuations of Flutter, we think the strike price of that is somewhere close to the money. And when you look at the fact that we've got roughly 8 years to go before we have to make a decision around exercising the just the mathematical option value of that option is enormous for us. And so that's the second place we play. And the third place is we had obligations with respect to FOX Bet in terms of commitments around on screen integrations and marketing and all the rest of it and we're now a free agent for that. And we've seen a lot of inbounds come through in terms of people wanting to partner with us from a commercial perspective. We're already taking a ton of revenue from sports betting in a national perspective. But there will be opportunities that we'll have a look at in terms of deeper commercial partnerships with operators. So we continue to -- the shuttering of FOX Bet is no indication whatsoever the fact that we've sort of lost any interest in that space.

And with the recovery in the various sports betting assets in the public markets, does that change how you're thinking about the time frame of exercising the option?

No, not really. The fact that we've got such a long-dated option affords us the opportunity to wait and see how the market really plays out. And that's a market, and we look at that from multiple levels, right? It's like it's consumer adoption where we thought it would be and all signs are that it completely is and is FanDuel the right asset. And all indications are that it is. But there's nothing would force us to exercise that option anytime soon.

Okay. So moving on just to sports rights in general, like they've been escalating across the board and it's kind of leading some to be more selective about what they keep, what they let go because they just climb so high. So as you think about your sports portfolio, how would you bucket the different rights under your umbrella in particular, with WWE? What are your considerations of retaining it versus just moving on to other rights?

So I won't comment specifically on WWE, but let me give you some color on sports. So for us, we think we're well spent in terms of overall portfolio spend on sports rights. We have, over the course of the last 4 years, touch longer, actually, we've been really, really focused on getting long-term extensions on what we call foundational rights. And none other more emblematic than the long-term extension we've got for NFL. But if you look at NFL, MLB, college, have a bedrock of rights that take us to the latter part of this decade and into the next decade that we feel really good about. And that is a really, really significant platform that affords us what I would say we're always disciplined about all of our rights and all of our rights have to pay their own way. But it allows us to be sort of, I guess, much more clinical in the way we look at renewing existing rights or looking at new rights that we want to sort of acquire for the portfolio. And so we'll take a really, really as I said, clinical look at the renewal of rights that we have on the slide at the moment, determine the value they deliver to us both from an advertising perspective and the impact that they have in terms of incremental affiliate revenue versus what's the right owner expects to receive in terms of rights cost, and we'll make that mathematical equation and be super disciplined about it.

So it's been 2 years since the launch of USFL. Can you give us the key takeaways, the highlights of it? And is there anything you want to change? How would you judge the success of this so far?

So USFL like it's a really interesting asset because we've got a fantastic sports franchise. We have in our schedule, we have, I guess, a gap in spring where from a broadcaster perspective, having the USFL come a little bit after NFL is really helpful from an end-to-end schedule. And we've seen USFL find its place from an audience perspective, we'd like the audience to be bigger, but it's certainly sort of makes weight in terms of -- it compares well with regular season baseball compares, well with MLS, those kind of assets. You've seen us the first season of NFL, we hubbed all our teams in Birmingham in Alabama. The most recent season, we've expanded that. We think there's a couple of things for this to be successful. One is we need to be much more local. And so you saw us expand from being in one hub to go into 4 hubs. So you'll see us continue to expand that hub model in order to generate true sort of local interest we would hope that the audience continues to develop and the proof will be in -- like we share were co-owners of the rights with NBC. And so we would expect real success to be determined by sort of what the revenue opportunity is. And I think key to that revenue will be audience because that will inform what the broadcast deals will be on renewal, which is super important. And then on the ground monetization, whether it be with sponsorships, gate receipts. So we'll look at that. It's still -- it's nowhere near maturity, right? We're 2 years in. We're learning things. But we feel enthusiastic about what the opportunity is there as long as we can continue to take a local and continue to grow the TV audience.

We don't have a lot of time left. So I'll try sneak 2 more in. You made a lot of strategic investments through the years and a lot of strategic asset sales as well. So how do you think about Fox's asset mix today? And how do you think about M&A and how that fits into your strategy?

So we've -- when I look -- I don't know if your last question will be on capital allocation, so I'll answer capital allocation square. So when we look at capital allocation in totality, right? You look at the history of Fox and the balance, but we want to grow the business, right? We want to grow the business organically. And if there's a great inorganic opportunity, we'll be -- we'll take the opportunity. But when you look at what's happened over the course of the last 4 years, the bias has actually been to sending capital back to shareholders. So last -- since the inception of Fox, impact, $6 billion of capital in the form of buybacks and dividends. $4 billion of that was buybacks, including the most recent fiscal year, we closed where we did more than we've ever done, which is $2 billion. We've done about $1.9 billion of gross M&A. But as you mentioned, we've sold about $500 million worth of assets, so $1.4 billion in net investment. When you look at capital allocation, the bias has been to returning capital to shareholders, but I think that's largely been because we haven't seen an opportunity attractive enough from an M&A perspective. None of the organic businesses we have in the portfolio of staff for capital. If we see growth opportunities, like we do with Tubi, we lean in and take deficits on those in order to grow them into the businesses they can be. We just haven't seen a particularly attractive sort of inorganic opportunity to apply capital towards. But our bias is to grow the business from what is an incredibly strong core with Sports and News and now with digital in terms of Tubi and we're on the lookout for those opportunities. But we look at everything that we have an incredibly high bar.

Okay. So you answer the capital allocation question. So maybe one last different one then. There's been a lot of speculation around linear assets and what could be for sale, especially Bob Iger spoken Sun Valley and there's some other companies that maybe should be selling us. That's like -- do you view yourself as a consolidator or an eventual target?

The short answer is probably no, right? I don't like the notion of defining a business baked distribution mechanism. So when we say linear assets, I go back to the core of what the asset is. Is it something that we can add value towards. So we've already made a clear bet in terms of where we see entertainment programming was the transaction we did with Disney and the focus on sports and news. So if there's something in there that we can bolster our sports and us services maybe, but it would have to be -- never say never, but it have to be a ridiculously opportunistic deal for us to pursue that path.

Great. We are at its time. So thank you so much.

Thank you, Jessica. Thanks, everybody.