Paramount Skydance Corporation (PARA) Earnings Call Transcript & Summary

Welcome, everyone, and thank you for joining us today. I am Shari Redstone, Chair of ViacomCBS' Board of Directors. And I'm joined today by the other members of our Board, including President and CEO, Bob Bakish. It's hard to believe that a year has passed since we last convened. And I want to thank you all for joining us again today. There is no doubt that this past year has been extremely difficult, from the terrible toll of COVID-19 to events that laid bare the divisions and inequities in our society. Amid these challenges, ViacomCBS has not only performed strongly, but also, as you will hear, used its content and platforms to help drive positive change. On a personal note, as you know, we lost my father, Sumner Redstone, in August. We miss him dearly, but I can tell you, he would be so proud of what we have accomplished and would be just as excited as I am about our company's bright future. At our investor event in February, we spoke to you about reimagining ViacomCBS for a new kind of marketplace and a new kind of consumer. And while only a short amount of time has passed since then, we have made great strides toward transforming this company and achieving our goals. We are optimizing the power of our combined assets and IP. We're unlocking more power in distribution. We're driving growth in subscribers across our portfolio of free, pay and premium streaming services. And we continue to realize the cost savings we promised when we announced the merger. We are now building on this new foundation and on our legacy of innovation. Simply put, we are better positioned to succeed because we have the best team in the industry. Our leadership and creative teams, our culture, our values, all of this proceeds and informs the vision and the strategy, and we have the vision and the strategy to win and to grow. It is a tremendously exciting time for our company, and I hope you share in that excitement. As I've said before, it starts and ends with content. As a pure-play content company, every single day, we're working for 2 mutually reinforcing objectives. First, to maximize the quantity and quality of content, what people want to see wherever they want to see it. And second, to maximize the value of that content for the long term and for all of our shareholders. The business case is simple, consumers demand a world-class experience with world-class content and delivering for our audiences. We have one of the largest content libraries in the world across film and TV, the largest broadcast footprint globally. The #1 share of viewing in the U.S. across key demos. And in social, ViacomCBS is the #1 company among broadcast, cable, radio and film properties in global social views. And with the successful launch of Paramount+, we now offer consumers even greater access to our content, with the unique combination of live sports, breaking news and a mountain of entertainment. Make no mistake, ViacomCBS is one of the kings of content. In February, I spoke about the transition occurring in our industry. But for consumers, it is clear, this change is happening at different paces in different places. We will all live in this hybrid environment for a while, and I am confident ViacomCBS is the company best positioned to enable this transition over time. Because of the incredible breadth and depth of our content and because wherever consumers around the world like to experience their favorite shows and movies today, our promise to them is simple. We will be everywhere they need us to be on every platform that matters to them with creativity, content and experiences that are second to none. Across linear, free, pay and premium streaming and in theaters, we will be there globally. And in the process, we will deliver to our shareholders' a whole that is far greater than the sum of its parts. In a moment, you will hear from Bob on the company's progress and priorities. After which Christa D'Alimonte, ViacomCBS' EVP, General Counsel and Secretary, will begin the official portion of our meeting. Subsequently, we'll open for a general Q&A which will be moderated by Anthony DiClemente, ViacomCBS' EVP of Investor Relations. I hope you leave today with a clear sense of our future together, the incredible growth opportunities we are already capitalizing on and our abiding commitment to driving value for all of our shareholders. The Board and I look forward to answering your questions and hearing any comments you might have. With that, it's my great pleasure to introduce you to the President and CEO of ViacomCBS, Bob Bakish.

Thank you, Shari, and good morning, everyone. As Shari mentioned, we lost Sumner Redstone last year. He was a true industry titan, a brilliant and driven pioneer whose influence on media and entertainment cannot be overstated. His guidance and leadership left a permanent mark on our company and helped shape who we are today as ViacomCBS. We remember his legacy and famous observation, "Content is king," which is as relevant to our mission today as ever, reaching our fans with nearly 32 billion hours of our content consumed across the globe. Now at the time of our last annual meeting, our work to unlock the power of our historic combination had just begun. Since then, despite the challenges of a global pandemic, we have made tremendous progress. And while the media landscape continues to evolve, we are confident in our position and believe we have the vision and strategy to succeed and deliver continued growth to our investors over the long term. To that end, we aligned our organization with strategic growth priorities, putting in place integrated structures, which allow us to harness the full global assets and capabilities of ViacomCBS. We're on track to exceed the cost synergies outlined at the outset of our merger. We realized more than $350 million in cost savings in 2020 and are on course to achieve $800 million in annualized run rate merger-related cost synergies by the end of 2022 before consideration of onetime cost to achieve it. We divested noncore assets, including selling CNET Media Group to Red Ventures as well as signing an agreement to sell Simon & Schuster to Penguin Random House. And we accelerated our efforts in streaming across our ecosystem of free, premium and pay services with a new unified global streaming organization to maximize our opportunity for growth, enhance our ability to serve audiences and partners around the world and create long-term value for our stockholders. In addition to other financial metrics, we finished the year with robust full year 2020 streaming results, growing our global streaming revenue to $2.6 billion, up 49% from 2019. And we're continuing to build on this success in 2021, reporting a solid first quarter earnings results during our call just a few weeks ago. We achieved strong total company growth in revenue, adjusted OIBDA, adjusted diluted EPS and adjusted free cash flow. Total revenue grew 14% year-over-year to $7.4 billion, driven by strength across advertising, affiliate and streaming. In light of our increased focus on streaming, for the first time, we broke out streaming as a revenue type within our results to provide greater transparency and insight into our business trends and progress. As a result, advertising revenue, which now excludes streaming, grew 21% in Q1, driven by our broadcast of the Super Bowl and NCAA tournament games. Advertising demand continues to improve with strong scatter pricing relative to the upfront and last year's scatter market. Affiliate revenue, which also now excludes streaming, grew 5% in the quarter, benefiting from distribution renewals in 2020 that included incremental carriage and improved economics as well as contractual rate increases. But our big focus in Q1 was streaming. Our global streaming revenue surged 65% year-over-year, fueled by strong growth in streaming advertising and streaming subscription revenue. And of course, the tremendous impact of the launch of Paramount+, our signature streaming service in early March. Take a look. [Presentation]

As you can see, Paramount+ is a must-have streaming service, one that harnesses our world-class studios, brands, franchises and IP to bring audiences the best in live sports, breaking news and a mountain of entertainment. 2,500 iconic films, over 1,400 live sporting events, more than 50 original series over the next 2 years, joining a catalog of more than 30,000 fan favorite episodes, and we're deploying it globally, having launched in the U.S., Latin America, Canada and the Nordics and more on the way. Since launch, we've continued to demonstrate our indisputable streaming momentum and the significant growth opportunity moving forward. Let's look at the numbers. In addition to the significant increase in global streaming revenue I mentioned earlier, we delivered another quarter of meaningful growth in monthly active users, subscribers and engagement across our free, premium and pay services. Pluto TV added 6 million global MAUs, bringing its total to nearly 50 million, and it remains the #1 free, ad-supported streaming television service in the United States. And thanks to our strong launch of Paramount+ and continued momentum in our other streaming services, we gained 6 million new global streaming subscribers, bringing our total to 36 million. Live sports and specials, kids content and original programming were the biggest drivers of Paramount+ sign-ups. And when it comes to consumption, original programming, content from our cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement. There's no doubt that our diverse content slate differentiates Paramount+. By the end of 2024, we aim to reach 65 million to 75 million global streaming subscribers across our services. 100 million to 120 million global Pluto TV MAUs and more than $7 million in global streaming revenue, which we believe will unlock significant stockholder value. And it's clear, our unique streaming strategy is working. That's why we're leaning in even more and building on the early success of Paramount+ by launching our ad-supported tier in June; by bringing a mountain of movies, more than 2,500, to the service this summer; by expanding our global reach to 45 international markets by the end of 2022; and by leveraging the $2.7 billion capital raise we completed in March to further drive our ambitions forward; to develop more original series and movies exclusively for streaming, with an average of an original movie a week coming in 2022; to pursue incremental streaming sports rights like we did with the premier Italian soccer league, Serie A; to accelerate global launches and market expansion and to further reduce the amount of content we license to third-party streamers, instead preserving more for our in-house streaming services. Moreover, we have the power of our global studios, including CBS Studios, Nickelodeon, MTV Entertainment, Paramount and ViacomCBS International Studios, aligned to produce some of our best content for Paramount+. And while our achievements to date would have been remarkable in normal circumstances, they're even more impressive given the ongoing impact of the COVID-19 global pandemic. Despite the challenges, our employees, crew and talent continue to persevere and demonstrate incredible adaptive creativity in the way we work. We've made great headway in safely returning to production, all very focused on implementing a strong set of protocols with the health of our people top of mind. Looking back, 2020 was also a year in which our company demonstrated who we are and how we show up for our employees, audiences and communities in these times of need. We believe we must lead with action and use the power of our brands, content and global reach to positively impact issues that matter. From our massive #AloneTogether campaign to help slow the spread of COVID-19, to initiatives that inspired our audiences to exercise their rights, represent their interests and vote, we did just that. And in response to the events of racial injustice, our efforts to amplify the voices of Black communities and condemn racism were just a handful of the actions we took to stand up for what's right. I'd be remiss if I didn't acknowledge that today marks 1 year since George Floyd's murder. We remain committed to justice, equality and inclusion by using our content and platforms to help drive change and by expanding our commitments to advance equality, combat social biases and ensure our company reflects, celebrates and elevates the diversity of our audiences globally. In addition to those continued efforts, we've activated a broad range of antibias and antihate initiatives, including supporting our employees and audiences with the recent rise of antisemitism and AAPI violence. For the first time last year, we also launched an inclusion website and made our diversity data public and published an environmental, social, governance report to address the ESG impacts that are most material to our business stakeholders. In June, our company will continue this work by joining for our annual day of service, one of the most important traditions at ViacomCBS that truly connects us with our audiences and communities to make an impact. Here's a brief look at how we came together last year. [Presentation]

In closing, I'd like to thank you all for your ongoing support of ViacomCBS. We're committed to unlocking value across our business for our employees, audiences, partners and stockholders and are thrilled about our future as we capture an even greater share of a growing and long-term global opportunity in streaming. With that, I'd like to introduce Christa D'Alimonte, our Executive Vice President, General Counsel and Secretary, to take us through the formal business portion of the meeting.

Thanks, Bob, and good morning, everyone. I'm Christa D'Alimonte, Executive Vice President, General Counsel and Secretary of ViacomCBS. Before we begin, I want to echo Bob's gratitude for your support. I'm glad that so many of you could be with us today at our annual meeting. I would also like to join Shari and Bob in remembering Sumner Redstone and honoring his enduring legacy on our company and then acknowledging the terrible toll of the COVID-19 pandemic as well as the long-standing pain of racial and social injustice, including the murder of George Floyd one year ago, today. I will now take us through the business portion of today's meeting. And I ask that you observe the rules of conduct that are posted on our annual meeting website. Please note that we will have a general question-and-answer session following this business part of the meeting. So I ask that you limit your questions at this time to the specific agenda items being voted on. You may submit any questions by following the instructions on the annual meeting website. Joining us for today's meeting are representatives of PricewaterhouseCoopers; our independent auditor; American Election Services, our independent inspector of election, and Broadridge Financial Solutions, which has certified that it properly mailed our proxy materials on our behalf. Stockholders who held ViacomCBS class A common stock at the close of business on our record date of March 26 are entitled to vote today. A list of the stockholders entitled to vote is available for inspection by accessing the registered shareholder list link found on the annual meeting website. Based on information provided by Broadridge, I can confirm that we have a quorum of stockholders present so that we can conduct today's meeting. The polls for the items to be voted on at this meeting are now open. Class A stockholders who have not already voted or who wish to change their votes may do so now by following the instructions on the annual meeting website. Please note that if you have already voted and do not wish to change your vote, you do not need to vote again now. The first item of business is the election of directors, the 13 nominees named in our proxy statement are Bob Bakish, our President and Chief Executive Officer; Candace Beinecke, the Senior Partner of the law firm of Hughes Hubbard & Reed; Barbara Byrne, former Vice Chairman of Investment Banking at Barclays; Brian Goldner, Chief Executive Officer of Hasbro; Linda Griego, President and Chief Executive Officer of business management company, Griego Enterprises; Robert Klieger, a Partner in the law firm of Hueston Hennigan; Judith McHale, President and Chief Executive Officer of Private Investment Company, Cane Investments; Ronald Nelson, former Executive Chairman of the Board and Chief Executive Officer of Avis Budget Group; Charles Phillips, Co-Founder and Managing Partner of technology investment company, Recognize and former Chairman and Chief Executive Officer of Infor; Shari Redstone, Chairperson, CEO and President of National Amusements and Co-Founder and Managing Partner of private investment company, Advancit Capital; Susan Schuman, Executive Chair and Co-Founder of consulting firm SYPartners; Nicole Seligman, former President of Sony Entertainment and Sony Corporation of America and former Chief Legal Officer of various Sony units; and Frederick Terrell senior adviser with investment management firm, Centerbridge Partners. Biographies for each of the nominees are included in our proxy statement. Our Board recommends a vote for each of the 13 Director nominees. The second item of business is the ratification of the audit committee's appointment of PricewaterhouseCoopers to serve as our independent auditor for fiscal year 2021. Our Board recommends a vote for this proposal. The third item of business is the approval of an amendment and restatement of our 2009 long-term incentive plan, the plan is an equity compensation plan under which we grant equity awards to executives in order to align their interests with the interests of our shareholders, incentivize and reward achievement of financial objectives and retain talent and build executive ownership in the company. This plan is currently the only long-term incentive plan under which we make grant equity awards to our executives. We're requesting an extension of the term of the plan, an increase in the number of shares of Class B common stock authorized for issuance under the plan and the removal of the plan's full value award sublimit as well as other technical changes. A detailed description of the terms of the amended and restated plan is included in our proxy statement, and our Board recommends a vote for this proposal. The fourth item of business is a stockholder proposal from Mr. Kenneth Steiner, requesting that our Board takes steps to enable stockholder proxy access. Mr. [ John Chevedden ] will be presenting the proposal. Operator, please open the line for Mr. [ Chevedden ]. Mr. [ Chevedden ], we appreciate you joining us today. And as you know, we've allocated 3 minutes for your presentation. But ask that you please go ahead.

This is [ John Chevedden ]. Can you hear me okay?

Yes, we can. Thank you.

This is Proposal 4, shareholder proxy access. Shareholder requesting that our Board of Directors take the steps necessary to enable as many shareholders as may be needed to combine their shares to equal 3% of our stock owned continuously for 3 years in order to enable shareholder proxy access with the following provisions: nominating shareholders and groups must have owned at least 3% of the outstanding shares of common stock of the company continuously for a period of at least 3 years. Such shareholders shall be entitled to nominate a total of up to 25% of the number of authorized directors. Proxy access for shareholders enables shareholders to put competing director candidates on the company ballot to see if they can get more votes than some of management's director candidates. A competitive election is good for everyone. This proposal can help ensure that our management will nominate directors with outstanding qualifications in order to avoid giving shareholders a reason to exercise their right to use proxy access. Proxy access has been adopted by 580 major companies, including 71% of the Standard & Poor's 500 since 2015. Adoption of this proposal will make ViacomCBS more competitive in its corporate governance and thus improve the bottom line. Management does not have much of an excuse for failing to measure up to the 580 companies that have adopted this proposal. Management claims it has a thoroughly unremarkable list of governance practices that a lot of other companies have, plus it lags behind these average companies by not adopting this proposal. In resisting this proposal, management claims it has a shareholder outreach program. If so, what good is the so-called outreach program because apparently it never asked shareholders whether shareholders wanted this mainstream proposal adopted. The unfortunate attitude of management is that since ViacomCBS is average or below average, the ViacomCBS management goal is to block improvement on management and accountability to shareholders. Management claims that shareholder should be satisfied with only an informal method to suggest new director candidates to the Board. Please vote yes, shareholder proxy access proposal 4.

Thank you, Mr. Chevedden. ViacomCBS is committed to understanding and considering the viewpoints of our stockholders through effective stockholder engagement. But based on a careful review of the proposal as well as our current corporate governance and stockholder outreach practices, we do not believe the adoption of proxy access is the right approach for Viacom CBS. For these and the other reasons described in our proxy statement, the Board recommends a vote against this proposal. We have received 1 shareholder question regarding compensation of our President and CEO, and I would refer you to our proxy statement, which contains detailed disclosures regarding Mr. Bakish's compensation and our compensation committee's approach to executive compensation. Since there is no other business to come before the meeting and no further questions on the items to be voted on, the polls are now closed. I have the preliminary report of the inspector of election on the voting results. Each of the proposals voted on today other than the stockholder proposal has been approved by a majority of the shares entitled to vote at this meeting and present directly or by proxy and is therefore approved. Less than a majority of the shares entitled to vote at this meeting and present directly or by proxy were voted in favor of the stockholder proposal, and that proposal is, therefore, not approved. We will report the voting results of today's meeting on a Form 8-K in the coming days, and the final report of the inspector of election will be included in the records of this meeting. That concludes the formal business of the meeting and the business portion of our meeting is now adjourned. We're now happy to open the meeting to questions from stockholders, and we'll answer as many as time allows. And so I'd like to introduce Anthony DiClemente our Executive Vice President of Investor Relations, who will moderate our question-and-answer session.

Thank you, Christa, and thank you all for joining us today. As Christa said, my name is Anthony DiClemente, EVP of Investor Relations here at ViacomCBS, and I will be hosting today's question-and-answer session. Our first question is for Bob. When do we expect -- or when should we expect to complete the sales of Simon & Schuster and Black Rock?

Yes. Sure. So with respect to Simon & Schuster, we have a deal in place for a sale. That deal is pending regulatory approval, but we expect that, that deal will close sometime later this year. With respect to Black Rock, that's a sale process we paused with COVID and we look forward to resuming that process once market conditions allow for that. So that's something that will happen in the future, and we haven't determined an exact date yet.

Okay. Thanks, Bob. Our next question is, how do you feel about your competitive position in streaming, particularly relative to recent news of industry consolidation? And relatedly, how do you plan to compete with other streaming players over the next 3 to 5 years?

Yes, sure. So look, we're operating in a dynamic media environment, but I think it's important to note that in that environment, we have incredible global momentum across each of our streaming lanes. And as you know, we participate in the free pay and premium segments. And importantly, that momentum was really enabled by our own transformational transaction with United CBS and Viacom over 1 year ago, and you've heard about all the work we've done to unlock value from that combination. Specifically, in terms of momentum, I'd point to our prepared remarks, which indicated that as of the end of the first quarter, we had 36 million streaming subscribers globally. Nearly 50 million monthly active users on Pluto TV, and that was adding 6 million streaming subscribers and 6 million MAUs, respectively, in the quarter. So we feel great about that momentum. And as we look forward and think about competition and competing, I'd point out that there are really 3 core elements that you need to compete. One is content. I think that's fairly obvious, but content in the form of global scale production capabilities and a large library. Second, broad distribution. And third and importantly, the financial capacity to really invest in developing the streaming business and, in particular, new content assets. We are one of the few companies in the world that possesses all 3 of those. And let's just talk a little bit more about that to give you a true sense of the asset base. Start with content, we have scale across both production and library. That is a scarce combination. On the production side, we're one of the largest producers of content in the world. We are proven hit makers. Those hit makers are at Paramount, at Showtime, at CBS Studios, at Viacom International Studios, Nickelodeon and MTV Entertainment. We're using those studios for a broad range of initiatives, including to launch 36 originals on Paramount+ this year, with that number growing to over 50 next year. And again, that's uniquely possible because of the production assets that we have in-house. Add to that, a broad and deep library, of IP and shows, including over 140,000 television episodes and over 3,600 films. That too feeds our streaming ecosystem with great franchises. By the way, in terms of streaming and Paramount+ by the end of July, we'll have 2,500 -- over 2,500 films on the service. We'll be at an annual run rate of 1,400 live sporting events and will have a catalog of over 30,000 fan-favorite episodes on Paramount+. So we're really putting that content asset to work. We're doing that. Secondly, through a very broad and ubiquitous distribution strategy, our distribution footprint is very expansive. And we have deep relationships on a global basis with every major distribution partner. That includes MVPDs, i.e., you would think of as cable operators, vMVPDs, the virtual side of that over-the-top side, streaming platforms and connected TVs. So a lot of strong relationships on the distribution side, enabling ubiquitous distribution. Finally, financial strength, we are in great shape and have a formidable financial position. As you know, we spend over $15 billion a year on content. And importantly, our company is only levered at 2.2x, and that's before any cash proceeds, which are over $2 billion from the sale of Simon & Schuster and any future asset sales like Black Rock. So that financial position gives us tremendous flexibility as we look to compete in streaming.

Just to add what Bob said, I feel really good about our company's position. We're seeing real momentum in streaming across our free, pay and premium platform. I firmly believe that we do have the best team in the industry as well as a clear and differentiated strategy in incredible assets around the world. As Bob mentioned, ViacomCBS is one of the largest content libraries globally, IP and franchises that are loved around the world, one of the few remaining Hollywood studios in global production capabilities that are second to none. The Board and I are committed to maximizing the value for all of our shareholders, and we have every confidence that the power of our assets combined with the strategy Bob and the leadership team are executing against, we'll do just that.

Great. Thanks, Shari. Our next question related to the $15 billion in content spend that Bob mentioned, and we're getting a few questions on this topic. Can you just talk a little bit more about the investment in our content assets going forward. How will ViacomCBS increase its content spend, particularly in streaming going forward?

Yes. So as I mentioned, our content investment budget in 2020 was around $15 billion that supports all aspects of our business in both the traditional side and the streaming side and, again, makes us one of the largest content producers in the world. Importantly, as we pursue what we see as a very significant global streaming opportunity with a market that continues to expand, we will, of course, invest aggressively in streaming content. We, in fact, expect streaming content expense to grow to at least $5 billion a year by 2024, and that number includes content that will create exclusively for our streaming services, and some allocation of highly valuable content that we use -- we'll use across both streaming and traditional. And that may be linear television, that might be theatrical. To bring that to life, you will see us increasingly harness the full power of ViacomCBS and lean into scaling up more of our content on Paramount+. Couple of examples of that. We're going to release Infinite, which is a sci-fi thriller starring, Mark Wahlberg. That will premiere exclusively on Paramount+ in June. That will also be a signature element as we increase the depth of the film library on the service, adding 1,000 additional titles in early June. And then following that up to get us to a total of 2,500 by July. We have other exciting movie properties coming to the service in July. A Quiet Place Part II will come to the service after its 45-day theatrical window, which starts this weekend. By the way, we're super excited about A Quiet Place II. The movie is fantastic. I've seen it multiple times. The early reviews have been stellar. It's 91% on Rotten Tomatoes. And in fact, presale tickets are higher than they were when we were about to release it pre-COVID. So we're feeling great about that movie. But it's not just movies. Obviously, we're doing a lot on the series side as well, including moving stuff from linear to exclusively be on Paramount+. An example of that is Evil. That's a show that's going to move to Paramount Plus in June. Season 1 was a hit on CBS. And by the way, it was a hit on Netflix as well. Season 2 is exclusively moving to Paramount+. We're going to do a similar thing with SEAL Team in the fall, where we'll actually premier a couple of episodes on CBS and then go exclusively to Paramount+. You've heard also that we're active in the sports space in streaming. Most recently, we picked up the rights to Serie A, which is the Italian soccer league, and that's another important step in us becoming the #1 destination for soccer fans, now with over 1,400 matches per year. I'd also be remiss if I didn't point out that we have the Champion League finals on Paramount+ this weekend, and that's for you soccer fans or football fans, I should say, featuring Chelsea and Man City. So we're excited about that. Of course, you also probably are aware that we extended our relationship with NFL that's critical for the company overall and critical for what we're doing in streaming. And in fact, we have the flexibility with the new deal to have NFL product games, if you will, on both our premium tier at $9.99 and our new essentials tier at $4.99, which is launching in June. We're also doing a lot in the scripted space. And you'll see later in this year, we're going to launch Yellowstone: 1883, which is the first Yellowstone spin-off. A lot of excitement about that as well as another show, new show from Taylor Sheridan, who produced Yellowstone, Mayor of Kingston. And then we're going to add -- continue to add to our reality slate whether that's Big Brother, an exclusive after-show for Love Island. In the unscripted side, the return of Behind the Music. So a lot going on and that's all as we continue to ramp our streaming content investment. We believe that by 2024 that $5 billion will represent a $4 billion increase from where we were in 2020. And I think it's important to note that, that increase is not all increased at the total. We are doing a lot of remixing. Shifting content investment from traditional media, linear, et cetera, to the higher growth streaming area, which keeps the overall content expense growth rate down. So we feel great about what we're doing on the content side. And we feel great about our level of investment and firepower and our ability to really optimize that to unlock a very significant streaming opportunity while simultaneously continuing to support our legacy business.

Thanks, Bob. So we just have one more question, and that is does the company plan to buy back stock? And so can you talk a little bit about your capital allocation strategy, particularly in light of the recent capital raise?

Yes. Sure. So let's do it in reverse order. Let's talk about capital allocation, writ large. We have a sequential approach to capital allocation. It starts with investing in our operating business, including in streaming. We then, of course, continue to pay a dividend. We anticipate continuing to do that over time. We have been on a delevering path. And now, as I mentioned, are at 2.2x, we will continue to look at that. We have done some small M&A tuck-ins. You heard about our Miramax deal where we bought a piece of that company and a very attractive value-creating way. We recently acquired Chilevisión, which is a Latin American broadcaster and content producer. So we'll do small deals like that. But importantly, we are not going to deploy capital to buy back our stock. We do not believe that is the highest and best use of that. We much prefer to continue to invest in our business, including importantly and streaming. And that was what the incremental capital raise in the spring was all about. So with that, look, we thank you for your time. We thank you for your support. We are very excited about ViacomCBS and we are committed to its success. We are confident in our strategy. We're executing well, and it's all about delivering strong shareholder returns, which is job 1 for the management team. It is early innings in the continued transformation in media. But again, we feel great about what we're doing in streaming. And again, I'd only point to the first quarter momentum, where streaming revenue was up 65% year-to-year. So thanks for your support. We look forward to continuing the dialogue and we'll talk soon. Stay well, everyone.

Thank you, everyone.

This now concludes the meeting. Thank you for joining, and have a pleasant day.